Bubble Risk Seen in Record Small-Cap Valuations: Korea Markets
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The rally in South Korea’s smaller companies that drove stock valuations to all-time highs is prompting the nation’s biggest money manager to warn of a bubble.
The small-cap Kosdaq Index is valued at 18.3 times projected earnings, the highest since Bloomberg began tracking the data in November 2011. The gauge jumped 13 percent this year through yesterday, outperforming the benchmark Kospi and the MSCI Emerging Markets Small Cap Index by 11 percentage points.