Asia’s Most Sought-After Emerging Market Is About to Get Hotter

Asia’s Most Sought-After Emerging Market Is About to Get Hotter

For investors seeking to ride the global reflation story in 2021, South Korea appears to be one of the hottest places in Asia.

Global funds are buying shares in the nation’s tech-heavy stock market at the fastest pace in four years this quarter, helping to make the Kospi Asia’s best-performing major benchmark in 2020. At $58 billion, their purchases of local bonds this year are on course for a record. And the won is tussling with the yuan for the region’s No. 1 spot.

Next year is shaping up to be another bullish one for Korean assets even as coronavirus infections are rising. A revival of the memory chip cycle is forecast to pull the local economy out of its first recession from 1998, prompting JPMorgan Chase & Co. to predict the Kospi will rise 16% to 3,200 by the end of 2021. The won could test 1,000 a dollar, a level unseen since the 2008 global crisis, leaving an upside of nearly 9% from the current level, according to Bloomberg Intelligence.