That has contributed to the stock markets' weakness. The result has been illiquidity and forced pricing for foreigners. Due to labor unrest and lost production, South Korea will continue to be depressed. An entrenched bureaucracy will make it difficult for the market to recover. But if the investment restrictions are lifted, the long-term outlook could be good.
Valuations are quite low.
The Thai market fell almost continuously in 1996. Fears over economic and political stability have damaged investor confidence. Foreigners have turned to other markets in the region, particularly Hong Kong. While valuations have improved, earnings are expected to weaken further. We are unlikely to witness a pickup in the short term.