The Korean Kospi Index (Korea’s stock market benchmark), after rising in early August to a peak of 2,668 points,
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underwent a rapid correction that pushed prices down to below 2,280 points.
The short-term technical picture appears contrasted: the strong short-term oversold may, however, prevent a further selloff and favour a lateral consolidation phase.
An eventual recovery will however have to face a hard obstacle in the 2,485-2,500 points area. A return above this area can only occur after an adequate re-accumulation phase.
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Instead, a descent below 2,275 points would be dangerous, as it could trigger a rapid correction that will have a first target in the 2,255-2,250 area and a second target close to 2,200 points.
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The following ETFs can be used to invest in the Korean stock market:
Franklin Ftse Korea, ISIN IE00BHZRR030. This ETF has €348m in assets under management, physical replication of the underlying and adopts an accumulation policy (with dividends being reinvested within the fund). The total expense ratio (TER) is 0.09% per annum.
HSBC Msci Korea, ISIN IE00B3Z0X395. This ETF has €269m in assets under management, physical replication of the underlying (via a swap) and has a distribution policy (with dividends being distributed semi-annually to investors). The total expense ratio (TER) is 0.50% per annum.
Lyxor Msci Korea, ISIN LU1900066975. This ETF has €92m in assets under management, synthetic replication of the underlying (via a swap) and adopts an accumulation policy (with dividends being reinvested within the fund). The total expense ratio (TER) is 0.45% per annum.
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