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Morgan Stanley also gives Korea top billing. Together with Taiwan, it is the best place to be, says the bank, as the two markets have a reputation as “early-cycle” leaders in the demand recovery. Goldman Sachs also noted that five years of selling has driven foreign ownership of Korean stocks to its lowest level since 2009, but inflows of about $6 billion since end-June “indicates a turn in foreign interest” that could lift the market further.
Goldman Sachs is underweight Taiwanese stocks, citing geopolitical risk, while Bank of America is neutral and its most recent survey of Asian fund managers shows they are bearish. There is less agreement when it comes to China, where big investors seem to be in a wait-and-see mode, or India where investment houses feel an 8% rally for the benchmark Sensex has left valuations a bit pricey.