Archive

Archive for May, 2010

Finding a Niche in South Korea

May 27, 2010 Leave a comment

The renewed tensions in the Korean Peninsula sparked off by allegations that North Korea torpedoed and sank one of South Korea’s naval ships, have caused jitters to the markets in the region recently.  I think the measures by South Korean President Lee Myung-Bak will, in the long run, probably be positive since it may accelerate change in North Korea and result in a move towards opening up that country.

In the short term, of course, there will be anxiety, which could impact the markets.  North Korea has been in a crisis continuously and the tensions have been present since the end of the Korean War.  Of course, we can never underestimate the possibility of full-scale war in the Korean Peninsula. Having said that we believe the probabilities are quite low, given the interests of all major parties on both sides to contain the situation. Despite all the geopolitical concerns, South Korea has continued to grow its economy.

Reading the latest news headlines reminded me of my recent trip to South Korea.  Landing at the new Incheon airport in Seoul is a pleasure. It’s hard to believe that modern Incheon saw the landing of General MacArthur’s Korean War troops, who risked the extreme tides that could quickly transform Inchon beaches into a muddy quagmire.  When I was living in South Korea during the 1960s, I remember being knee deep in the Incheon mud and taking mud baths there.

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Categories: Perspective

Comments on Thailand

May 21, 2010 Leave a comment

We must remember that Thailand has been the subject of political turmoil since the end of absolute monarchy in 1932.  Since that time, the country has had 27 prime ministers, 18 constitutions, 20 successful and failed coups, and many violent demonstrations.  As a result, local and international investors have become accustomed to these events and have not been sellers at such times.

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Categories: History, Perspective

Readers’ Questions Answered Part III

May 12, 2010 Leave a comment

It’s been a while since I responded to questions from readers so here are a few of my comments.

I read with interest your blog on Greece. The panic has now spread to Portugal and Spain. What are your comments here? How do you think Greece will pull through? Even though Greece isn’t an emerging market, reports like this are certainly affecting the emerging markets.
– George, United States

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Categories: Perspective

Keeping an Eye on Currencies

May 6, 2010 Leave a comment

The value of the Chinese currency, the renminbi, has been a hot topic in recent weeks. China ties the value of the renminbi to the value of the U.S. dollar. Recently, however, the U.S. and some global institutions have increased pressure on China to change this valuation, which, they argue, has kept Chinese exports relative to the U.S. comparatively cheap. But the U.S. Treasury Department, which was due to issue a report on China’s currency on April 15, 2010, delayed this report by several months in order to allow a series of high-level meetings to take place.

As bottom-up equity investors, we focus on individual companies when evaluating investment opportunities. However, it is also important for us to understand how a company looks within its sector and country or region, and as such, our outlook on currencies forms part of our broader assessment on a company’s operating environment.

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Categories: History, Perspective