{"id":2199257,"date":"2022-10-26T07:39:19","date_gmt":"2022-10-26T07:39:19","guid":{"rendered":"https:\/\/www.nknews.org\/koreapro\/?p=2199257"},"modified":"2023-04-05T16:11:05","modified_gmt":"2023-04-05T07:11:05","slug":"south-korean-banks-are-wildly-undervalued-foreign-investors-should-take-a-look","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2022\/10\/south-korean-banks-are-wildly-undervalued-foreign-investors-should-take-a-look\/","title":{"rendered":"South Korean banks are wildly undervalued. Foreign investors should take a look."},"content":{"rendered":"
Both the South Korean won and the stock market have been pummeled over the past year. The former currently stands at around 1,430 to the U.S. dollar, nearly reaching levels last seen during the 2008 global financial crisis. The Korea Composite Stock Price Index (KOSPI) hovers between 2,200 and 2,300, down from a <\/span>peak<\/span><\/a> of around 3,300 last June.<\/span><\/p>\n Taken together, this means Korea is on sale from the perspective of those operating in U.S. dollars. For example, the <\/span>most popular<\/span><\/a> South Korean exchange-traded fund with international investors, iShares MSCI Korea (ticker symbol: EWY), is down by <\/span>almost half<\/span><\/a> from a peak of $96 in Jan. 2021 to $50.<\/span><\/p>\n This is arguably not even a <\/span>value trap<\/span><\/a> situation, in which future earnings decline to the point where stocks are revealed to have been cheap for good reason. According to Yardeni Research, the <\/span>forward price-to-earnings<\/span><\/a> (P\/E) ratio of Korean stocks <\/span>stands at 8.9<\/span><\/a> as of Oct. 19, which is low compared to other countries as well as Korean historical standards.\u00a0<\/span><\/p>\n Unless analyst expectations of future profits are completely off base, South Korea looks like a bargain.<\/span><\/p>\n As a group, the cheapest stocks of all are financials. And a closer look at their numbers and at the political environment in which they operate indicates that they are both wildly undervalued and unlikely to fail, suggesting they warrant greater consideration from outside investors.<\/span><\/p>\n