A $1.7 Trillion Stock Rally Fails to Wipe Out ‘Korea Discount’

South Korean stocks have yet to close their long-held discount against peers even after a $1.7 trillion rally, with earnings growth making a case for the world-beating advance to continue, money managers say.

The Kospi Index has more than doubled since the start of 2025, fueled by President Lee Jae Myung’s drive to eliminate the “Korea discount” — a perennial markdown tied to governance issues — and a global artificial intelligence boom. Valuations have improved but are barely keeping up with profit forecasts, according to investors at Jupiter Fund Management and Matthews Asia.