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The “Korea discount” is shrinking. What happens next?

The “Korea discount” is shrinking. What happens next?

Is the long-standing "Korea discount" finally a thing of the past? 📉

A fascinating new analysis from Franklin Templeton highlights that South Korean equities have been on a powerful run, forcing global investors to reconsider a market previously dismissed as "cheap for a reason."

What’s driving the shift?
💡 The AI Buildout: South Korea’s dominance in high-bandwidth memory makes it a crucial structural player in global AI infrastructure.
🛡️ Defense Boom: The country has rapidly climbed the ranks to become a top 5 global arms exporter.
⚖️ Corporate Reforms: The government’s “Value-Up” framework is pushing companies toward better dividend frameworks and share buybacks.
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The Takeaway: While the valuation gap is narrowing, sustainability will depend on corporate execution. If these shareholder-friendly behaviors stick, we are looking at a structural re-rating of the entire market.

What are your thoughts on South Korea’s market potential this year?


https://www.franklintempleton.ca/en-ca/articles/2026/etf/the-korea-discount-is-shrinking-what-happens-next

The opinions expressed in this article are of the fund company that owns this content and do not constitute professional advice or recommendation. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

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