Trailing 10 Year Price-to-Sales Ratio

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Will Government Take Further Action?

One of the most crucial questions when thinking about South Korea is whether the government will undertake more aggressive monetary policy actions to protect the country’s global market share. Although difficult to know with certainty, I think more can be done, and ultimately the probability of the government doing more is higher than of it doing nothing. Therefore, given the relatively low starting valuation, coupled with the potential for the central bank to provide stimulus to the economy, we may be looking at an attractive combination for South Korean equities.

For more research on South Korea, read our Market Insight South Korea at a Crossroads.

 

1“South Korea says weak yen a challenge,” Reuters, 10/23/14.
2“S. Korea Fires Warning Shot to Japan: We’re Watching Yen-Won,” Bloomberg, 5/3/15.
3Bank of Korea, Monetary Policy Decision, 3/12/15.

Important Risks Related to this Article

Investments focused in South Korea increase the impact of events and developments associated with the region, which can adversely affect performance.

– See more at: http://www.wisdomtree.com/blog/index.php/south-korea-valuations-close-to-2009-levels/#sthash.EbaKXkMX.dpuf

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