Global investment banks have projected that South Korea's benchmark KOSPI could climb to 8,500 in the first half of this year, with a bull-case scenario pushing the index to 10,000 by year-end.
According to the financial investment industry on the 13th, Morgan Stanley said in a report the previous day, "We expect the KOSPI to continue its upward momentum on the back of structural growth and sustained reform," presenting a year-end KOSPI forecast range of 6,500 to 9,500.
Morgan Stanley's first-half KOSPI target is 8,500. Under a bull-case scenario, the bank sees the index potentially reaching 10,000 by year-end. Even in a bear-case scenario, Morgan Stanley set the KOSPI floor at 6,000. The bank added SK Square and NC to its focus list.
Morgan Stanley said, "External uncertainty stemming from the Middle East situation will persist in the second half, but we believe the Korean stock market will demonstrate strong post-conflict resilience." It added, "If the Iran war extends beyond June, the ripple effects could be considerable, but preemptive policy measures should serve as a buffer."
The bank continued, "Korean capital markets have been perceived as cyclically sensitive with a heavy weighting in physical assets such as industrials and materials, which has been a disadvantage for the KOSPI. However, industrial cycles in IT, energy security, defense, reconstruction, autos, and robotics are set to continue for multiple years."
Morgan Stanley is not the first global IB to set an upper KOSPI target of 10,000. JPMorgan, in a report on the 10th, also projected a bull-case KOSPI target of 10,000. Its base case calls for 9,000, while its bear case sees the index at the 6,000 level.
JPMorgan said, "Regardless of whether a Middle East conflict settlement is reached, commodity prices will remain above pre-war levels, and a stagflationary environment is likely to persist." It added, "We recommend expanding exposure to AI and security regionally, and Korea is a market with significant exposure to both areas."
Goldman Sachs raised its KOSPI target to 9,000 on the 7th, just 20 days after lifting it to 8,000 from 7,000.
In the era of KOSPI 8,000, semiconductors may not be the main story — ignore 'this stock' at your peril.
