- By the end of the third quarter, South Korea’s Kospi has risen nearly 6% so far this year. In comparison, the Shanghai composite in China has risen about 5.5%, while the Japan’s Nikkei 225 remains around 2% lower.
- Nomura’s Chetan Seth says there’re three reasons behind the positive performance of South Korean shares: retail investor support, the country’s handling of the coronavirus pandemic as well as the composition of the stock market.
SINGAPORE — South Korea’s markets have powered ahead of their peers in a year that has seen major economies globally falling into recession as authorities race to stem the economic and public health fallout from the coronavirus pandemic.
By the end of the third quarter, the country’s Kospi has risen nearly 6% so far this year. In comparison, the Shanghai composite in China has risen about 5.5%, while Japan’s Nikkei 225 remains around 2% lower.
“I think there are three factors which are positive for Korean markets this year,” Chetan Seth, an equity strategist at Nomura, told CNBC’s “Street Signs Asia” on Thursday.
Firstly, stocks have gotten “massive support” from retail investors, a factor Seth said has acted as a “huge positive.”
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“There’s a reason why that’s happening. Interest rates are low, property market outlook is not so great so that money, that savings, that current account surplus has to go eventually into financial assets,” Seth said. “Equities is possibly the only avenue.”
The Nomura strategist added that the coronavirus pandemic remains “under