U.S. Institutions Say Stocks In Korea Are Undervalued

U.S. institutional investors believe that a Kospi index at 500 is the bottom of the market and see growth ahead, a Korean investment manager said Wednesday.

The President and CEO of Korea Investment Trust Management Co., Zoh Young-jae, returned from a 12-day visit to meet with institutional investors, saying foreign investors still find Korean stocks undervalued and attractive. The firms he visited include Morgan Stanley Dean Witter, Goldman Sachs, Merrill Lynch and Salomon Smith Barney.

"I believe that their investments in the Korean stock market surpass those in Japan because undervalued Korean shares attract foreigners' interest," Mr. Zoh said. "They are especially interested in local banking stocks and telecommunications shares," he added.

Many U.S. investors plan to expand their investments here because Korea's market growth potential is greater than neighboring countries, Mr. Zho continued.

But he said his U.S. interlocutors believe the nation's financial restructuring measures are still insufficient and the government's inconsistent economic policies drew criticism. The investors said they cannot forecast economic trends when policy is erratic.

by Chung Jeh-won