(SEOUL = Newsis) As the global economy has started to show signs of recovery, structurally undervalued emerging markets will be reevaluated and Korea is likely to become the main beneficiary of the reevaluation.

Khiem Do, head of the Asian multi-asset division of Baring Asset Management in Hong Kong, held a press conference on January 9 in Yeoido and said that the stock markets of Asian countries and other emerging markets can expect the highest profitability for the next 10 years, but that market volatility will also remain high.

“Korea and China may become powerhouses of the international stock market in 2014 if they are supported by appropriate reforms and policies as well as global economic growth,” said Do.

“It is somewhat uncertain that the U.S. stock market is likely to post another winning session given that the market is strong and the United States will reduce its quantitative easing. Emerging markets in Asia, on the other hand, possess a great deal of growth potential,” he said.

“In particular, investors with long-term investment strategies will be interested in the neglected emerging markets,” Do added.

Do also analyzed that worries over emerging markets are not based on fact, but on perception, and whether the Asian market will be able to lead other markets depends on the performance of policy makers and leading companies in Korea and China. “Foreign investors have negative perceptions of Asian stock markets and will not wait for China’s infrastructure development to achieve outcomes. However, reform measures that have been carried out for the last 10 years will show outcomes in the future and also change the perception of foreign investors,” he said.

“ASEAN countries and China will provide investment opportunities in the Asian region for many years, and the stock markets show positive signs due to the continued economic recovery and the implementation of an expansionary monetary policy,” said Tim Scholefield, Head of Global Equities of Baring Asset Management Korea Ltd.

“The gap between emerging markets and advanced markets will be gradually narrowed, and factors including Japan’s increased consumption tax and reduction of quantitative easing by the United States will make investors turn to emerging markets. It’s almost time for investors to turn their attention,” he said.

badcomma@newsis.com

Source Text

Source: Newsis (Jan. 9, 2014)

** This article was translated from the Korean.