A South Korean exchange-traded fund jumped Tuesday to its highest level in two years after exit polls showed a liberal candidate won the country's presidential election.
Moon Jae-in had 41.4 percent of the votes, versus 23.3 percent for conservative candidate Hong Joon-pyo, according to exit polls cited by Reuters. The election ends months of political uncertainty for the longstanding U.S. ally, after President Park Geun-hye was impeached and jailed for alleged corruption.
The iShares MSCI South Korea Capped ETF (EWY), which trades on NYSE Arca, climbed more than 1 percent in morning trade and is now up nearly 24 percent on the year. The 'EWY' is at its highest level since August 2014, completely reversing a two-year slog amid the political scandal.
The largest holdings in the U.S. ETF include the South Korea issues of Samsung Electronics and Hyundai Motor. Samsung is 24 percent of the fund.
EWY two-day performance
To be sure, Moon appears less in line with a more aggressive turn in U.S. policy towards North Korea. Moon opposed the U.S. deployment of a missile defense system in South Korea and supports more engagement with North Korea.
The new leadership could consequently work more closely with China. Beijing has retaliated against South Korean businesses — especially conglomerate Lotte — for allowing the U.S. to construct a missile defense system so close to China's borders.
Earlier this year, shares of the firm's retail arm, Lotte Shopping, had dropped more than 17 percent from a February high. The stock has since more than recovered those losses.