Can Korea keep its ‘morning calm’ amid the selloff?

South Korea's stocks and bonds have evaded the worst of the regional market rout, but can the so-called 'land of the morning calm' keep its cool?

Despite a history of sharp market swings, overseas investors view the country differently from other emerging economies, Bank of Korea Governor Kim Choong Soo told CNBC in a recent interview.

(Read more: Is a 'flash flood' back into emerging markets next?)

"Foreigners will find the Korean market a little more stable," he said. So far, he appears to be right.

Stocks in the country, dubbed the "land of the morning calm" in a poem by Indian poet Sir Tagore, have dropped less than 2 percent so far in August, outperforming the MSCI Emerging Markets Index's more than 2 percent fall, as well as equities in Indonesian and India, which have tumbled more than 13 percent and over 5 percent, respectively.

In the same period, the Korean won has fallen about 0.7 percent against the U.S. dollar, compared with the Indian rupee's more than 8 percent drop and the Indonesian rupiah's more than 6 percent slide.

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Compared with its regional neighbors, South Korea has also maintained relatively sound macro fundamentals, Kim said.

"Korea has a relatively substantial amount of current account surplus," Kim noted. "The growth rate may not be that high but (it's) reasonably high, considering the external environment," he added, citing a growth target of 2.8 percent this year which he calls "not an ambitious target."

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Kim also sees expected moves by the Federal Reserve to taper its bond purchases as offering potentially positive signals for South Korea as it will signal a recovery in the U.S. economy.

"We will enjoy the positive spillover effects of the U.S. economic recovery," he said, noting most of the country's economic growth comes from exports, not domestic demand, in stark contrast to much of emerging Asia.

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"The percentage of exports relative to GDP exceeds 50 percent for Korea; it's only 10 percent for the U.S., and 13 percent for Japan. So our growth basically depends upon trade. And for the case of domestic demand, consumption is the largest component, but with such a heavy household debt, you can't expect your consumption to grow," he added.

Industry watchers also expect some resilience from the market. "We believe Korean bonds would be more resilient than other Asian government bonds due to South Korea's sound fundamentals such as the current account surplus," Deutsche Bank said in a recent note, although it also didn't expect any "flight-to-quality" flows to benefit government bonds much.

(Read more: South Korea central bank holds rates, as expected)

In the week ending August 21, South Korean bonds saw outflows of $32 million, well below outflows of $48 million from Malaysia and $76 million from Indonesia, according to a report from ANZ Research. Comparatively, Korea's gross domestic product in 2012 was nearly four times Malaysia's and about a third larger than Indonesia's, which may indicate the outflow isn't as big a bite.

South Korean stocks may also offer better value. The MSCI Korea index is trading at 8.1 times forward earnings, a more than 11 percent discount to its long-term average of 9.1 times, according to data from Nomura. This compares with Indonesia trading at 12.5 times, a substantial premium to its long-term average of 10.5 times , the data show .

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Fidelity Investments, which manages more than $4 trillion, tips South Korea as among its top picks.

"Great companies at bargain prices," Catherine Yeung, an equity investment director at Fidelity, told CNBC.

"There're some very interesting names, tapping into the Chinese consumer story. In fact a lot of the Chinese are traveling there now," she said, citing benefits for hotels, department stores and cosmetics companies. "It's not just about the big Samsungs and Hyundais."