South Korea: more than Hyundais, high tech giants and handbags

If you think Sex And The City proves Manhattan is the epicenter for narcissism and conspicuous consumption, think again. According to the Financial TImes, the world’s first handbag museum opens today in an upscale shopping district of Seoul, South Korea.

Image courtesy Satin Shirt: http://www.flickr.com/people/satin_shirt/

Sex And The City, moving to South Korea?

This is evidence of the shift in economic power to Asia and other emerging markets. It also helps show the strength of the South Korean economy. Samsung (SSNLF, quote) has passed Nokia (NOK, quote) and now sells the most mobile phones in the world. Samsung is also the global leader in high tech sales. It is very strong in China and other emerging markets too.

South Korea’s auto makers Hyundai (HYMLF, quote) and Kia (KIMTF, quote) produce motor vehicles that match any around the world, and they have the sales and awards to prove it. Sales of Kia and Hyundai are rising in both the United States and Europe. The 2013 Hyundai Electra is ranked the third best small car in the United States. That’s an honor Japanese and German automobiles used to win.

Export earnings from all these goods create the level of affluence that has led to the first handbag museum in history.


If there’s a Sex And The City 3, why not set it in South Korea’s handbag museum?

Due to the pink sheet listings of such top companies as Samsung, Hyundai, and Kia, the exchange traded fund for South Korea, iShares MSCI South Korea Index Fund (EWY, quote) is an appealing option. Like other ETFs, it offers diversity, protection against currency fluctuations, professional research resources and low expenses, particularly for investing in emerging markets. EWY is down recently due to growth concerns in China. 

Now trading around $52.88, EWY is below its 52-week high of $66.43. When Chinese economic growth recovers, EWY will rebound with the rest of Asia. As with so much of the world, South Korea does better when China’s economic engine is firing on every cylinder. A recent interest rate cut by the Bank of Korea is intended to stimulate the economy however.

A beta of 1.65 means EWY is much more volatile than the stock market as a whole, so investors have the opportunity to buy when it dips to lower prices and lock in long term gains. 

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