Uncertainty brings opportunities in the field of investment, according to experts who attended the Seoul Money Show 2024, the largest financial fair in Asia that kicked off its three-day event on Thursday at the Convention & Exhibition Center (COEX) in Samseong-dong, southern Seoul.

“The U.S. stock market is usually strong in a presidential election year, but given that there is also a possibility of a slowdown, investors need to prioritize increasing the proportion of U.S. assets and also include Korean stocks, which are undervalued compared to Japan,” experts said.

The latest event was held under the theme of “All About Investment.” It attracted 15,000 visitors on the first day.

Standard Chartered Group Global Chief Investment Officer Steve Brice noted during a keynote speech that the correlation between the incumbent president‘s approval rating and re-election just before a presidential election is a strong indicator for a change of government.

Brice added that looking at the 24 presidential elections since 1928, the S&P500 index rose an average of 8.9 percent when the Republicans were re-elected, and 10.4 percent when the Democrats were re-elected, so there is no need for concern for U.S. stock investors.

Brice also emphasized the need to reduce cash holdings and increase the proportion of equity assets this year, including U.S. stocks.

He said that communication and information technology (IT) stocks such as Google LLC (Alphabet Inc.) and Nvidia Corp. are promising because their earnings per share (EPS) growth rates are higher than other sectors.

There was also a general consensus that this year is a time of easing the so-called “Korea discount.”

Brice said that the proportion of companies with price-to-book ratios (PBR) of less than 1 in Korea is 45 percent, compared to 25 percent in Japan, indicating that Korea is more undervalued.

He added that Korea is one of the most promising markets as it has launched a corporate value-up program focusing on shareholder returns and has a higher percentage of companies with positive net cash flow (43 percent) than Japan (41 percent).”

Yeom Seung-hwan, director at eBEST Investment & Securities Co., also observed that “unlike Korean investors, foreigners are responding with net buying to Korean corporate value-up programs.”

“Investors who aggressively invest in Korea’s low PBR automobile and financial holding companies will be able to increase their returns,” he said.

Experts also advised investors to include emerging market dollar-denominated bonds and gold in their portfolios in the latter half of the year for diversification purposes.

Regarding the Korean real estate market, many predicted a flat outlook, but some suggested that (the second half of the year) could be an opportunity for actual buyers to purchase their own homes.

By Moon Il-ho, Sohn Dong-woo, and Yoon Yeon-hae

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