Opportunities in China might be the first place to look for emerging market (EM) trade opportunities. But South Korea shouldn’t be overlooked.
“South Korea has long been an EM powerhouse, from its days as one of the four Asian tigers to its current status as a global manufacturing leader boasting a well-diversified economy,” noted Sammy Suzuki of AllianceBernstein in Advisor Perspectives.
The investor sentiment reacted favorably when China’s government said it would add more stimulus measures to boost growth. That said, when government gets involved in EM countries, it appears to have a positive effect. And this could also happen in South Korea. The government is also taking steps to make its stocks more appealing to investors.
“Now, policymakers in Seoul are looking to attract even more investment by improving the shareholder experience for South Korea’s listed companies,” Suzuki added. “The government’s ‘corporate value-up’ program is aimed at boosting stock prices in part by improving corporate financial disclosure—while also encouraging stock buybacks and higher dividends.”
As the Advisor Perspectives article mentioned, these proposals won’t cause change overnight. But over time, the effects on stock prices could be a net positive for investors looking for EM opportunities.
Trade South Korea With 3X Exposure
Traders looking for broad equities exposure to trade strength in South Korea can look to the Direxion Daily South Korea Bull 3X Shares (KORU ). The fund offers 300% of the daily performance of the MSCI Korea 25/50 Index. The index measures the performance of the large- and midcap segments of the South Korean equity market. It provides broad-based exposure that adds diversification benefits.
The U.S. is already exploring growth opportunities by collaborating with South Korea, as noted in a report by MSN. This, in particular, pertains to South Korea’s role in helping to supply critical minerals for green energy technology.
“I think that our focus going forward has to be unlocking new opportunities for growth while securing the progress that we’ve already made,” noted Jose Fernandez, Under Secretary for Economic Growth, Energy and the Environment. “Continuing our partnership means improving the capabilities of our industries and the livelihoods of our countries’ citizens.”
“Our cooperation on critical and emerging technologies and clean energy transition will define the future of our two countries,” said South Korean Vice Foreign Minister Kang In-sun. “Not only that, but it will also have the power to shape the geo-economic landscape of the Indo-Pacific.”
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