HONG KONG (Yonhap News) ― The victory of a conservative contender in South Korea’s presidential election is seen to be rather positive for Asia’s fourth-largest economy and its markets, with no drastic change in the country’s policies expected, market watchers said Thursday.

Park Geun-hye, a candidate from the conservative ruling Saenuri Party, won a tight but decisive election victory earlier in the day, becoming South Korea’s first female president-elect. Park, the daughter of the late President Park Chung-hee who ruled the country with an iron fist for 18 years, is set to take the top office in February.

JPMorgan expected a smoother policy stimulus implementation in 2013, with the ruling party maintaining both the presidency and the parliament.

“Given Park’s relatively less harsh stance on the theme of ‘economic democratization,’ we expect the outcome to be positive for Korean equities,” said Scott Seo, an analyst at JPMorgan.

Economic democratization was one of the main agenda points in this year’s South Korean presidential election with both the ruling and opposition parties pledging to improve narrowing the wealth divide, creating more jobs, and strengthen fair competition.

Park’s milder stance on the issue will be beneficial for the Korean equities as it removes uncertainties surrounding the possible implementation of stringent polices on chaebol, or family-owned business conglomerates such as Samsung and Hyundai Motor, the U.S. bank said.

JPMorgan also expected policy measures will be focused more on boosting domestic consumption and maintaining more balanced growth between exporters and domestic-oriented industries.

British firm Barclays said the new administration’s main policy framework will be in line with the existing one.

It said the result of the election is slightly positive or neutral, with the global macro environment being more crucial to the market in the short term.

“The incoming government will prohibit new circular holdings but leave existing circular holdings within the conglomerates unchanged,” Park Chan-ik, a Barclays analyst, said.

“It has a slightly tighter policy on income tax, capital gain tax and corporate tax, but no significant differences compared to the incumbent government.”

Nomura predicted that the new government’s policies will have only a limited effect on South Korea’s export-driven growth model.

“We do not expect the political ideology of the next government to change the macro policy stance,” said Kwon Young-sun, an economist at Nomura.

“We do not expect the South Korean economy to rebalance away from exports and toward domestic demand because the country’s small population and high urbanization rate limit domestic demand potential.”

Credit appraiser Moody’s Investors Services expected overall continuity in economic policies during her presidency.

“President-elect Park’s stance on ‘economic democracy’ is likely to be measured, although social welfare spending will likely rise by a greater degree during the next five years of Park’s term of office to meet popular demands,” Moody’s said.

“Nevertheless, Korea’s strong fiscal fundamentals provide a significant leeway in policy to cope with new demands and shocks.

The government’s balance sheet was unscathed by the 2008 global financial crisis. Debt is at a moderate level and gross financing requirements are very low,” it said.