South Korea Set to Benefit from AI Semiconductor Boom and Corporate Governance Reforms
South Korea, alongside Taiwan, is poised to be a major beneficiary in the theme of artificial intelligence (AI) semiconductor hardware. The ongoing corporate governance reforms, referred to as value-up initiatives, are also generating excitement among investors. This was highlighted in a recent interview with a senior market strategist from JP Morgan Asset Management, who expressed optimism about the trajectory of the South Korean stock market in the near future.
The competitive edge of high-bandwidth memory (HBM) products used in AI semiconductors was noted as a key attractive factor, alongside the implementation of value-up policies since last year. The strategist pointed out that the market returns have traditionally been dependent on corporate earnings, which has been cited as a limitation for markets in Asia, including South Korea. However, with the ongoing structural changes driven by these value-up policies, there is potential for sustained upward momentum in the market.
The focus on certain sectors like semiconductors and defense industries was emphasized. Increased defense spending in Asia and Europe is leading to heightened arms purchases, while there is strong demand for South Koreas shipbuilding industry from both the U.S. and Europe. The growth in exports from the semiconductor, defense, and heavy industry sectors is expected to have positive ripple effects on the financial sector as well.
To attract more foreign capital into the domestic market, it is essential to continue the push for value-up policies. The head of JP Morgan Asset Management in Korea mentioned that the assets under management in the domestic market have more than doubled over the past five years, with one of the driving factors being the value-up policies. For foreign investors to feel secure enough to make long-term investments in the domestic market, trust in the sustainability of these policies must increase.
During the Asia Media Summit held in Yeouido, Seoul, these insights were further elaborated, shedding light on the promising outlook for South Koreas economy and its market dynamics amid the evolving landscape of technology and governance reforms.
The competitive edge of high-bandwidth memory (HBM) products used in AI semiconductors was noted as a key attractive factor, alongside the implementation of value-up policies since last year. The strategist pointed out that the market returns have traditionally been dependent on corporate earnings, which has been cited as a limitation for markets in Asia, including South Korea. However, with the ongoing structural changes driven by these value-up policies, there is potential for sustained upward momentum in the market.
The focus on certain sectors like semiconductors and defense industries was emphasized. Increased defense spending in Asia and Europe is leading to heightened arms purchases, while there is strong demand for South Koreas shipbuilding industry from both the U.S. and Europe. The growth in exports from the semiconductor, defense, and heavy industry sectors is expected to have positive ripple effects on the financial sector as well.
To attract more foreign capital into the domestic market, it is essential to continue the push for value-up policies. The head of JP Morgan Asset Management in Korea mentioned that the assets under management in the domestic market have more than doubled over the past five years, with one of the driving factors being the value-up policies. For foreign investors to feel secure enough to make long-term investments in the domestic market, trust in the sustainability of these policies must increase.
During the Asia Media Summit held in Yeouido, Seoul, these insights were further elaborated, shedding light on the promising outlook for South Koreas economy and its market dynamics amid the evolving landscape of technology and governance reforms.
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