Even as the K-pop heartthrobs of BTS wrap up their military service and plot their return to arenas worldwide, the hottest thing in South Korea lately has been its stock market. Global investors poured almost $3 billion into Korean equities in May and June, propelling the country’s benchmark index up about 28% in the first half of the year, trailing globally only Slovenia’s blue-chip index, a gauge of Zambian equities and a basket of 20 Polish stocks.
It’s a dramatic turnaround for a place that’s undergone huge political and economic turmoil in recent months: a declaration of martial law (rescinded hours later), a presidential impeachment and removal from office, and Donald Trump’s 10% tariffs—scheduled to jump to 25% on July 9—which threaten to wreak havoc on export juggernauts such as Hyundai, LG and Samsung. Despite those hurdles and the global malaise stemming from wars in the Middle East and Ukraine, investors are piling into Korean stocks because, they say, the country’s business culture is poised for a sharp transformation. “Such movements are unstoppable once they start,” says Kim Ki Baek, a portfolio manager at Korea Investment Management Co.
