North Korea's attack on South Korea was "symbolically important," but will not lead to all-out war, Richard Kim, head of Korean sales at Auerbach Grayson, said on CNBC Tuesday.
Moreover, Kim said investors could earn short-term trading profits of 20 percent buying such South Korean companies as Samsung Electronics, Korea Exchange Bank and Woori Finance Holdings . Auerbach Grayson is an agency broker, providing execution and clearance for equities, derivatives and fixed-income securities.
On Tuesday, investors chose instead to sell holdings in South Korea, as two exchange-traded funds offering U.S. investors the purest play on the South Korean market sank more than 5 percent each on heavy volume.
The $4 billion iShares MSCI South Korea ETF, which owns big-cap companies like Posco , Samsung and Hyundai Motors, slumped more than 5.5 percent, with more than 6 million shares changing hands before 2 pm ET. Usually only 3.5 million shares change hands, said Paul Justice, a Morningstar analyst.
The IQ South Korea Small Cap ETF, with only 7 million in assets, fell nearly 6 percent. About 21,000 shares changed hands in the less widely-held fund, up from the usual 10,000, Justice said.
The more-established iShares fund has had a volatile performance. Year-to-date the fund was up about 19.5 percent, after rising 70 percent in 2009, according to Morningstar. The fund slumped about 56 percent in 2008.Page 1 of 3 | Next Page