Helped by low interest, low oil prices and the weak won, the Korean stock market is expected to recover this year despite negative market consensus, Baring Asset Management said Tuesday.

“Taking account of the weak won, KOSPI (the main bourse) has room to rally. Capital outflows will ease at a faster pace in Korea than any other emerging markets,” John Park, chief investment officer at Barings, said during a press conference in Seoul.

However, he noted that the equity market would not enter an upward trend. “It will rather fluctuate up and down similar to last year, but possibly at a higher range,” he said.

He suggested investors focus on selecting promising individual stocks rather than investing based on index or sector predictions in such an investment environment.

The CIO forecast that foreign investors will return to Korean equities during the first half of 2016 when uncertainty surrounding the timing of U.S. interest hike diminishes.

According to the Korea Exchange, offshore investors have been on a selling mode since Dec. 2, offloading a net 3.98 trillion won ($3.28 billion) worth of shares traded on the main KOSPI market.

Regarding the U.S. Federal Reserve’s rate hike, Khiem Do, head of the Asian multi-asset group at Baring, expects the next rate increase will be in April or June.

“The Fed is likely to raise rates another two to three times in 2016, taking the rate close to 1 percent by the year-end,” he said.

Although the rout in Chinese stocks led Asian stocks to sink in 2016’s first trading week, he called the concerns over another global financial crisis as “excessive pessimism.”

“While this year also encompassed foreseen risks, the equity market deserves a cautiously optimistic view,” he said while stressing that China is not sliding into recession.

Barings Asia CIO Wilfred Sit said Asia remains one of the highest growth economic regions in the world in spite of ongoing market volatility.

He warned of evaluations on the Chinese economy based on traditional sectors, such as construction and manufacturing, as the country’s discretionary spending is growing at a fast clip.

“Travel and tourism spending by Chinese consumers is one significant development in the Asian region. This will have a sustainable and long-lasting positive impact on many firms around the region,” he said.

By Park Han-na (hnpark@heraldcorp.com)