Friday, July 20, 2007

Invest in South Korean Stocks from the USA

The economy of South Korea is the "fourth largest in Asia and the twelfth largest in the world in terms of market exchange nominal GDP as of 2006." Korea over the last few years, is averaging a growth rate of 6.5% The country is part of the "Four Asian Tigers" which include Taiwan, South Korea, Hong Kong, and Singapore. The country has even decided to invest in advanced IT infrastructure, having high broadband penetration, and having internet speeds greater than the AT&T's DSL "elite" package.

South Korean stocks make up over 15% of iShares Emerging Market (EEM) Exchange Traded Fund, the largest country position in the fund. You can invest directly in Korea by investing in iShares EWY Exchange Traded Fund.

If you want to invest in individual Korean stocks from the US, you can choose from among a range of solid investment grade companies, to small capitalization, speculative stocks.

Banks and Financial Services

1. Kookmin Bank (KB) is a 30.7 Billion Dollar company, the largest lender in South Korea. There are rumors of HSBC Bank and Kookmin Bank competing over the Korea Exchange Bank.

2. Shinhan Financial (SHG) is another large South Korean Financial Services company with a market cap of 26.75 Billion dollars. Citigroup, on May 14, 2007, Upgraded the stock to a Buy. Its 5 year expected growth rate according to Yahoo Finance is 15.95%.

3. Woori Finance (WF) is a financial services company with a 21.44 Billion Dollar market cap and expected 5 year estimated growth of 10.2%. In 2001, the government put together four smaller banks and an investment banks to create Woori Finance.


4. Korea Telecom (KTC) is a 10.3 Billion Dollar company that provides telecom services in Korea. According to Motley Fool, Korea Telecom, as of March 2007, has a yield of 7% and a 3 year dividend growth of 52%.

5. SK Telecom (SKM) is a 19.85 Billion dollar telecom company with an expected 5 year growth rate of 12.55%. According to Motley Fool, the stock has a 3.2% yield, and "the stock will give you a hedge against the dollar and the potential for some growth in the company's Internet business. Of course, this is also an extremely competitive industry experiencing rapid changes in technology."

Online Gaming

Because of South Korea's great internet infrastructure, Computer Online Gaming has become a national passion.

6. Gravity (GRVY) is a small 179 Million dollar online gaming company. The company offers massively multiplayer online role playing games and offer various mobile games and license of merchandizing of character related products based on its online games such as Ragnarok Online. (Yahoo Finance).

7. Webzen (WZEN) is another small 64 Million dollar online gaming company.


8. Gmarket (GMKT) is a 1 Billion dollar company that operates a retail-ecommerce marketplace in Korea. As of March 31, 2007, "the company had approximately 11.7 million registered users."


9. Korea Electric Power (KEP) is a 32 Billion Dollar company that is expected to grow by 9.8%. It is the third largest South Korean company by market cap.


10. Posco (PKX) is a 45.17 Billion Dollar Company that is expected to grow by 6.28%. It is the 2nd largest South Korean company by market cap, and has a PE of 13. Warren Buffett, as of Dec. 31, 2006, owns 4 percent of Posco. Apparently, Warren Buffett, and other analysts think Korea is now cheap.


11. LG Philips LCD (LPL) is a 16.24 Billion Dollar company, with a forward PE of 11, a 5 year estimated growth rate of 25%, for a PEG of 0.73. The company develops, manufactures Thin Film Transistor (TFT) based Liquid Crystal Display (LCD) panels.

12. Mirae (MRAE) is a speculative, under $2 146 Million Dollar company. The company designs, manufactures and sells semiconductor related equipment.

13. Pixelplus (PXPL) is another speculative under $2 13.7 Million Dollar company. The company is in the semiconductor industry.

Hana Telecom and Wider Than are two other companies that currently trade on the .PK "pink sheets."

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