South Korean Stocks Rise Most in Asia as Hyundai, Exporters Gain

South Korean stocks gained the most in Asia, led by exporters, as a stronger yen eased concerns about a loss of competitiveness to Japanese rivals.

The Kospi index rose 1 percent to 1,968.83 at the close. LG Electronics Inc., the world’s second-largest television maker, had its biggest gain in a month. Hyundai Motor Co. increased the most in almost three weeks, while affiliate Kia Motors Corp. climbed 3.8 percent.

The Kospi has declined 1.4 percent this year, compared with a 10 percent gain by the MSCI Asia Pacific Index, as a slump in the yen made Japanese exports relatively cheaper for overseas customers. The yen gained 0.4 percent against the dollar today, the most in two weeks. Japan’s currency has fallen 14 percent against the greenback this year, compared with a 3.8 percent drop by South Korea’s won.

The weakening yen “has been reflected too much on the valuation of South Korean exporters,” said Han Sang Soo, a fund manager at Samsung Asset Management Co., which oversees $114 billion. Technology companies and automakers are among shares that are cheap “and the market is now responding positively to it,” he said.

The Kospi trades at 9.9 times 12-month projected profit, compard with the MSCI Asia Pacific Index’s multiple of 13.8, data compiled by Bloomberg show. Trading volumes in the South Korean gauge were 1.6 percent less than the 30-day average.

Hyundai Climbs

Foreign investors bought a net 159 billion won ($143 million) of stocks today, while domestic institutions purchased 126 billion won, according to Korea Exchange data.

LG Electronics rose 2.8 percent, the biggest climb since April 10, to 85,500 won. The company got 22 percent of its 2012 revenue from North America. Hyundai Motor, South Korea’s biggest automaker, advanced 2.7 percent to 193,500 won. The gain was the most since April 25.

Kia, South Korea’s second-largest automaker, jumped 3.8 percent to 54,500 won. The company reported on April 26 a 35 percent drop in first-quarter profit as the won’s strength versus the yen dragged on sales.

The won advanced 0.3 percent against the yen today to 10.92, according to data compiled by Bloomberg. The won touched 10.82 yen on May 10, the highest level since September, 2008.

Before it's here, it's on the Bloomberg Terminal.