Salient to Investors:

William Pesek writes:

Scary drops in the Indian rupee, Indonesian rupiah, Malaysian ringgit and Thai stocks are fueling anxieties almost everywhere.

Korea is a rare exception. A current-account surplus equal to 4.9 percent of GDP, a well-performing won the IMF says is undervalued, and expectations for 4 percent growth in 2014.

Investors who bet against Korea over the last 15 years have not done very well.

Timothy Moe at Goldman Sachs said in June that worries related to Fed tapering are unlikely to impact Korean equities as much as the rest of Asia.

Korea’s real challenge is to find a new economic model to replace its previous dependence on exports, but it is moving too slowly.

Lee Jin-Woo at NH Investment & Futures said how Park intends to shake up Korea is all very vague, and the definitions keep shifting – no one knows what the president means or what she is doing.

Using slogans and photo opportunities with Mark Zuckerberg hasn’t worked for Singapore.

Reducing the role of Chaebol, family-run conglomerates, is central to making Korea more dynamic, but Park’s predecessor squandered his term broadening it. Unfortunately Park this week asked the Chaebol to increase investment to hasten economic growth and in return, promised she would prevent regulations from obstructing their business activities.

Scrapping a 5-year-old proposal to sell Korea Development Bank signals that Korea plans to follow the China banking model, now shackled with bad debts run up by indiscriminate lending to favored enterprises.

Korea is not headed for a lost decade as Koreans have proved time and time again that doubting their tenacity is a sucker’s bet, but one should not ignore the risk.

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