SEOUL, Sept. 12 (UPI) -- South Korea's KOSPI rose 1.54% Friday to approach 4,000 points. The benchmark stock index broke its record for three consecutive days, gaining more than 6.5% this month.
The bullish market sparks hopes that Asia's fourth-largest economy may finally overcome the long-standing "Korea discount," which refers to the tendency of Korean stocks to be undervalued compared to global peers.
The KOSPI index as a whole has shown a substantially poor price-to-earnings ratio well below the level seen in similar economies. The low ratio means that the country fails to reach the stock values that it deserves.
"The Seoul administration has tried to deal the with Korea discount by revitalizing the capital market. That appears to be working, as shown by the strong share prices of domestic brokerage houses and financial holding companies in recent months," HMC Investment & Securities analyst Kim Jae-seung told UPI.
"The solid performance of semiconductor companies also underpinned the recent rally. But the efforts to reduce the Korea discount are another factor underpinning the market surge," he said.
