Korea Best in Asia on Investor Confidence in Economy – Bloomberg 10-31-12

Salient to Investors:

South Korean growth in 2012 will beat Asia’s other wealthy nations.  The IMF forecasts South Korea’s economy will grow 2.7 percent in 2012 versus 2.2 percent in Japan, 1.8 percent in Hong Kong and 2.1 percent in Singapore.

Samsung, whose annual sales are equivalent to 13 percent of GDP, makes almost a quarter of the world’s mobile phones, and its Galaxy smartphones ended Nokia’s 14-year reign as the biggest maker of mobile phones. Hyundai Motor and Kia Motors are the most profitable of the six biggest global automakers – Hyundai’s Elantra was voted North American car of the year at the Detroit Motor Show.

Jim O’Neill at Goldman Sachs Asset Mgmt expects South Korea to grow 4.8 percent over the next decade.

Investors held 88.3 trillion won of local currency debt at the end of last month, double the amount in 2009.

Eric Stein at Eaton Vance Mgmt said the won is structurally undervalued and slowly but surely continue to appreciate.

S&P, Moody’s and Fitch Ratings boosted South Korea’s rating between late August and September on strong fiscal fundamentals and room to respond to external shocks.

Alaistair Chan at Moody’s Analytics Australia said Korea has a number of advantages including a large domestic market and economies of scale that will help the tech sector and the rest of the economy grow. Chan said Korea is quite well placed in the near to medium term to weather slow global growth.

Kim Nyeon Jae at Korea Investment & Securities said the IMF crisis in 1997-1998 changed everything – the slump is still locally referred to as “the IMF crisis”.

The Programme for International Student Assessment ranks Korea 2nd in the world in reading, 4th in mathematics, and 6th in science. Korea has the world’s highest average Internet connection speeds.

South Korea’s richest 20 percent earned 7.86 times more than the bottom 20 percent in 2011.

Royal Bank of Scotland says South Korea has one of the world’s fastest aging societies, whose working-age population will begin to contract by 2016, curbing growth by as much as 1.7 percent to 2.5 percent by 2050.

The Korea Institute of Public Finance said a merger with North Korea would drag down South Korea’s GDP by as much as 6.6 percent a year for a decade.

Read the full article at http://www.bloomberg.com/news/2012-10-30/south-korea-best-in-asia-as-investors-show-confidence-in-economy.html