South Korea is one of the fabled Asian Tigers, together with Hong Kong, Singapore and Taiwan. This rapidly growing economy is definitely one to watch over the coming years. After advisors in the world over spelled doom for the country’s economy due to the political tensions that surrounded the Korean peninsula, the call for peace and denuclearisation by the North Korean president, Kim Jung Un, came as the much-needed solace that investors all over the world have been waiting on. Despite its comparative impoverishment with regards to natural resources such as oil and minerals when compared to its neighbours, South Korea has more than made up for it through its technological innovation, and a strong, willing workforce.
The country takes pride in its immense technological advancement, with digitised systems running most of its major sectors including education, government and commerce. It has the highest internet penetration rate in the world, the fastest broadband speeds in the world, and cities such as its capital, Seoul, boast of having free Wi-Fi connectivity almost throughout the city. In addition to its powerful digital economy, many major companies in the world have cited South Korea as a good source of excellent human resource. With about 65% of youths aged 18-34 years having attained college degrees, it is no surprise as to why the world would turn to the country for an able workforce. The population is also made up of eager consumers of new and innovative products, especially from the technological sector. This consumerism drives the economy, keeping it vibrant and active year in, year out.
So, how can one get involved in this virile economy? Well, by leveraging international stock trading, foreigners can buy into South Korea’s stock market, which lists some of the world’s largest tech and engineering giants including Samsung Electronics, LG Electronics and Hyundai Motors. Stocks in the South Korean market are quite easily the cheapest in the region with great potential for growth over the coming years. Tech stocks, in particular, have been a major topic of discussion amongst investors and analysts alike. Companies worth watching out for over the coming years include:
This multifaceted tech giant is unsurprisingly the largest stock in the South Korean market. The manufacturer of all things electronic, ranging from consumer products such as phones, tablets, personal computers and home appliances, to industrial electronics such as semiconductors, is one of the top picks amongst investors and analysts, when it comes to the South Korean stock market. This is because it has generally maintained steady control over the market, citing a 29% increase in net income in the first quarter of 2018. It is definitely a stock worth watching over the coming years.
SK Hynix is South Korea’s second largest memory chip company, bested only by Samsung. It specialises in the production of random access memory chips. With its affiliation with major tech players such as Apple and Japan’s Toshiba, great growth is expected from the tech giant. It announced a 64% increase in net income in its first quarter of 2018, and seems to be growing with growth in the tech sector. Its share target price has been put at just short of USD 108, making it one of the most relatively inexpensive and yet promising stocks on the market.
This company is the operator of a number of deluxe hotels in the country. With an estimated 56% increase in the cost of stock being predicted, analysts and investors alike have their eyes on this hotelier. Significant growth in the tourism and hospitality sectors in the country have been cited as factors contributing to the growth of this stock.
Other stocks worth watching include LG Electronics and top Korean banks which will be leveraging higher interest rates in order to better their expected interest margins.
Ultimately, the South Korean stock market is definitely worth a look, as the domestic consumerism; connections to the Association of Southeast Asian Nations, the United States and to the European Union; and technological drivers keep it vibrant. With more than 2100 companies listed and a market cap of about USD 1.8 trillion, South Korean stocks are definitely worth being watched over the coming years.