The so-called Korean discount has worsened this year, with the country’s stock market more undervalued than financially-strapped Argentina`s, data showed.

According to a Maeil Business Newspaper study based on Bloomberg data measuring the price-to-book ratio from the MSCI index by country, Korea’s P/B ratio was 0.90 as of Nov. 4, down from 1.0 six months ago. This was lower than Argentina’s, which stood at 0.95.

P/B ratio measures a company’s market value in relation to its book value to evaluate whether it is over or undervalued. A ratio of less than 1 means that the company is undervalued, as the stock is selling for less than what its net assets are actually worth. Theoretically, investors could buy all the outstanding shares, liquidate the assets and still earn a profit because the assets are worth more than the stock price.

Korea’s ratio was significantly lower than that of advanced countries such as the U.S. (3.47), China (1.67) and Japan (1.28) as well as comparable peers like Taiwan (1.97) and Russia (1.11).

Korea’s stock market performance this year has been disappointing compared to other major economies. U.S. stocks hit a fresh high Monday, extending last week’s record-breaking run. Japan’s Nikkei 225 index also closed at a new annual high on Tuesday. Based on Monday’s close, the U.S. S&P 500 jumped 23 percent for the year, with the Nikkei 225 and China’s Shanghai Composite Index also up 17 percent and 21 percent, respectively. Korea’s benchmark Kospi rose 6 percent during the same period.

Among the G20 economies, only two markets performed worse than Korea this year – Indonesia and Saudi Arabia.

Korea is also losing ground on the prominent global benchmark MSCI Emerging Markets Index despite its relatively high earnings per share among the developing economies on the list. Institutional investors tend to align their portfolios with the index so that a country with a high weighting draws more foreign investment to its markets.

While China’s weighting on the index has been adjusted upward, Korea’s weighting has continued to slide, from 13.5 percent in January to 12.4 percent in late August. It is expected to fall even further to 12.2 percent later this month.

By Park In-hye, Ahn Gab-seong and Kim Hyo-jin

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