“Korea’s Stock Market Will Grow After General Election in April”

After Lee Myung-bak was chosen as Korea’s new leader at the 17th presidential election, Goldman Sachs on Thursday said that the nation’s stock market would strengthen after the general elections in April 2008. It also suggested that conservatives would win a majority of seats in the election, adding that the general elections would give a moment for the government to shift its economic policies toward market- and growth-friendly policies and stabilize the nation’s politics.

In its report released yesterday, the financial group said, “The landslide victory of the conservative Grand National Party shows the determination of Korean voters to change their regime. Given that president-elect Lee had been supported by around 40 percent of voters during the campaign despite a string of speculations and negative campaigning by other candidates, conservatives are highly likely to win the general election next year.”

Goldman Sachs pointed out that, “However, despite high expectations of investors, Korea is unlikely to bring about reform to its politics and economy before the general election in April due to the political deadlock. Along with uncertainties over global economy, it will probably weaken the nation’s stock market and strengthen volatility in the stock market until the first half of next year.“

swon@donga.com