UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number:  811-8002                     

KOREA EQUITY FUND, INC.

(Exact name of registrant as specified in charter)

Two World Financial Center

Building B, 18th Floor

New York, New York 10281-1712

 (Address of principal executive offices)

Shigeru Shinohara

Korea Equity Fund, Inc.

Two World Financial Center

Building B, 18th Floor

New York, New York 10281-1712

 (Name and address of agent for service)

Registrant’s telephone number, including area code:  (800) 833-0018

Date of fiscal year end:  October 31, 2009                         

Date of reporting period:                           May 1, 2009 – July 31, 2009                   

Item 1.  Schedule of Investments

KOREA EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
July 31, 2009
										% of
					Market		Unrealized			Net
	Shares		Cost		Value		Gain or Loss			Assets
KOREAN COMMON STOCKS
Automotive Equipment and Parts
Hyundai Mobis		69,722	$	5,282,714	$	7,384,476	$	2,101,762			7.3
Automotive service components
Hyundai Motor Company		42,920		1,595,159		3,092,543		1,497,384			3.0
Passenger cars, trucks, autoparts, and commercial vehicles
Total Automotive Equipment and Parts				6,877,873		10,477,019		3,599,146			10.3
Banking and Financial Services
Daegu Bank		211,390		1,581,318		2,429,075		847,757			2.4
Commercial banking services
Daewoo Securities Co., Ltd.		50,720		975,125		978,974		3,849			1.0
Brokerage, dealing and underwriting
KB Financial Group, Inc+		35,304		1,487,397		1,533,199		45,802			1.5
Commercial banking services
Samsung Card Co., Ltd.		65,030		2,574,685		2,659,279		84,594			2.6
Credit card services
Shinhan Financial Group Co., Ltd.		143,777		3,878,440		4,891,734		1,013,294			4.8
Consumer and commercial-related financial services
Total Banking and Financial Services				10,496,965		12,492,261		1,995,296			12.3
Consumer Electronics
LG Display Co., Ltd.		41,180		614,376		1,193,940		579,564			1.1
TFT-LCD
LG Electronics Inc.		29,281		1,762,757		3,101,243		1,338,486			3.1
Digital display equipment
Samsung Electronics Co., Ltd.		25,513		8,665,655		15,107,068		6,441,413			14.9
Consumer electronics, computers, and telecommunications
Total Consumer Electronics				11,042,788		19,402,251		8,359,463			19.1
Food and Beverages
CJ Corp.		34,600		2,819,767		1,426,221		(1,393,546	)		1.4
Processed food products
Nong Shim Co., Ltd.		8,873		1,472,061		1,781,567		309,506			1.8
Instant noodles, snacks, and beverages
Total Food and Beverages				4,291,828		3,207,788		(1,084,040	)		3.2
Iron and Steel
POSCO		18,731		4,327,008		7,690,326		3,363,318			7.6
Hot and cold rolled steel products
Miscellaneous Manufacturing
Doosan Heavy Industries and Construction Co., Ltd.		19,444		1,004,179		1,114,766		110,587			1.1
Plant components
Hynix Semiconductor Inc.+		149,577		1,594,899		2,153,067		558,168			2.1
Semiconductors
KT&G Corporation		63,770		4,249,976		3,718,656		(531,320	)		3.7
Cigarettes and other tobacco products
LG Household & Health Care Ltd.		8,125		869,395		1,465,251		595,856			1.4
Household cleaning and personal care products
Samsung Heavy Industries Co., Ltd.		37,010		906,969		982,232		75,263			1.0
Shipbuilding
Yuhan Corporation		8,252		1,170,442		1,316,055		145,613			1.3
Pharmaceutical products
										% of
					Market		Unrealized			Net
	Shares		Cost		Value		Gain or Loss			Assets
Woongjin Coway Co., Ltd.		57,930	$	1,200,168	$	1,456,897	$	256,729			1.4
Water purifiers and air cleaners
Total Miscellaneous Manufacturing				10,996,028		12,206,924		1,210,896			12.0
Oil and Gas
SK Energy Co., Ltd.		15,492		763,451		1,317,713		554,262			1.3
Refines, markets, and distributes oil
Retail
CJ Home Shopping		22,721		1,660,399		1,217,163		(443,236	)		1.2
Miscellaneous products
Lotte Shopping Co., Ltd.		7,177		1,177,010		1,804,962		627,952			1.8
Department and discount stores
Shinsegae Co., Ltd.		4,410		1,070,427		1,915,196		844,769			1.9
Department store chain
Total Retail				3,907,836		4,937,321		1,029,485			4.9
Services
LG Corp.		53,200		1,589,872		2,880,379		1,290,507			2.8
Holding company
Megastudy Co., Ltd.		5,030		515,999		980,741		464,742			1.0
Educational programs
NHN Corp.+		26,964		2,677,272		3,936,431		1,259,159			3.9
Web portal
Samsung Engineering Co., Ltd.		40,455		1,977,406		2,941,400		963,994			2.9
Engineering and Construction
Samsung Fire & Marine Insurance Co., Ltd.		7,855		2,063,030		1,323,407		(739,623	)		1.3
Non-life insurance
Total Services				8,823,579		12,062,358		3,238,779			11.9
TOTAL KOREAN COMMON STOCKS			$	61,527,356	$	83,793,961	$	22,266,605			82.6
KOREAN PREFERRED STOCKS
Automotive Equipment and Parts
Hyundai Motor Company PFD		70,210		1,340,620		1,877,703		537,083			1.8
Passenger cars, trucks, autoparts, and commercial vehicles
TOTAL INVESTMENTS			$	62,867,976	$	85,671,664	$	22,803,688			84.4
OTHER ASSETS LESS LIABILITIES, NET						15,873,514					15.6
NET ASSETS					$	101,545,178					100.0

†Non-Income Producing Security

* Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $ 25,911,413. Aggregate gross

unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 3,107,725.

Portfolio securities and foreign currency holdings were
translated at the following exchange rate as of July 31, 2009.
Korean won	KRW	1,222.70	= $1.00

Item 2.  Controls and Procedures.

(a)  The Registrant’s Principal Executive Officer and Principal Financial Officer evaluated the Registrant’s disclosure controls and procedures within 90 days of the filing of this report and concluded that they were effective in providing reasonable assurance that the information required to be disclosed by the Registrant in its reports or statements filed under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

(b)  There were no changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 3.  Exhibits.

(a)  Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 are attached hereto as an exhibit.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

KOREA EQUITY FUND, INC.

By:     /s/ Shigeru Shinohara        

        Shigeru Shinohara, President

        (Principal Executive Officer)

Date:  September 16, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the dates indicated.

By:     /s/ Rita Chopra-Brathwaite         

        Rita Chopra-Brathwaite, Treasurer

        (Principal Financial Officer)

Date:  September 16, 2009

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