Local markets may get a boost as South Korea moves onto the next chapter of its months-long political scandal: presidential elections due by May 9.
“The Korean market is trading at an 8 percent equity risk premium, this is the highest level ever in Korean history,” Daniel Yoo, head of global wealth management at Kiwoom Securities, told CNBC on Monday.
That figure is three percentage points higher than the U.S. market, and two percentage points higher than Japan, he said.
But if the country signals its commitment to transparent politics and structural reforms, investors will grow more confident and “the level of risk premium applied to the Korean economy will slowly go down,” according to Yoo.
The domestic market has always been trading at a high discount due to issues with corporate governance, Yoo noted.
