Castlestone's Zafari: South Korean equities are no war zone

Should geopolitical risk raise concerns about the South Korean equity market? We think not.

A weaker currency and temporarily lower equity prices in response to the threat of conflict can bode well for local companies and global investors. Though conflict is nothing to take lightly, South Korea’s blue-chip companies, namely those in the automotive and technology sectors, will remain resilient due to their strong foothold in emerging markets and growing export appeal. The potential for North/South Korea conflict can already tend to be priced into equities. A few days before the bombings on 23 November, the MSCI Korea index was trading at 9.6 times forward earnings versus 1...