Resurgence of the 'KOSPI 3000 Thesis'

KOSPI Hits New Intraday High
Youtuber-Centered "Real Estate Frenzy Speculative Funds Have Nowhere to Go but the Stock Market" Spreads

[Asia Economy Reporter Oh Ju-yeon] "The speculative funds that caused the real estate frenzy have nowhere to go but the stock market" "It's time to break out of the 10-year box market"

After the domestic stock market successfully made a 'V-shaped' rebound following the novel coronavirus disease (COVID-19) and reached new highs, the 'KOSPI 3000' theory that emerged in 2018 is resurfacing. The difference from the past is that in 2018, the possibility of the index reaching 3000 was suggested through annual forecast bands by securities firms, whereas this time it is being discussed among stock market-related YouTubers. They expect the KOSPI to continue rising, supported by abundant liquidity in the market and economic stimulus policies. They also sparked the KOSPI 3000 theory by saying that the U.S. stock market is likely to rise until around the November presidential election, and the domestic stock market will follow suit with these overseas markets.

According to the Korea Exchange on the 31st, the KOSPI rose to 2281.41 during the morning session, breaking the previous day's new high once again. The previous day, the KOSPI recorded an intraday high of 2281.33, surpassing the pre-COVID-19 high of 2277.23. Although it was intraday, surpassing the 2280 level is the first time since the crash in October 2018. The KOSDAQ index is also soaring, continuously hitting new highs. As of 9:34 a.m. that day, the KOSDAQ index rose 0.19% from the previous trading day to 815.76, approaching the level just before the crash caused by the U.S.-China conflict in 2018, which was 816.53 (closing price on October 1).

[Image source=Yonhap News]

As the market, which was shaken by COVID-19, quickly recovers, expectations for KOSPI 3000 are maturing.

On YouTube, there are numerous videos that have long predicted 'KOSPI 3000.' Some claim that the KOSPI will reach 3000 by the end of next year, while others mention which stocks to watch when KOSPI hits 3000. They present various reasons supporting the KOSPI 3000 theory, such as interest rate cuts, the U.S. presidential election, economic stimulus policies, and short-selling bans, with 'liquidity' being a repeatedly mentioned common factor.

One YouTuber argued, "Funds that were supposed to flow into real estate have been blocked by policies and are not going into banks due to low interest rates," adding, "Ultimately, the funds that have lost direction are all gathering in the stock market." Another YouTuber also said, "The so-called 'Donghak Ants' who flocked after COVID-19 are supporting the stock market," expressing hope that the expansion of the investor population will bring about a rise in the stock market.

The securities industry also finds their claims persuasive.

Lee Kyung-min, head of the Investment Strategy Team at Daishin Securities Asset Research Department, recently stated on a YouTube channel in a segment titled 'Domestic and International Stock Market Outlook After the COVID-19 Crisis' that while the opinion that real estate funds will flow into the stock market because the real estate market is blocked may have 'some' influence, it is more important to focus on the current situation of abundant liquidity.

Lee said, "There is already abundant standby capital waiting to enter the stock market, exceeding the amount of stocks already purchased," adding, "Although it is uncertain whether the stock market will reach 3000 next year, I expect the liquidity party to continue for a while, surpassing the historical high (intraday 2607.10 on January 29, 2018) thanks to the power of money, policies, and earnings improvement."

Meanwhile, according to the Korea Financial Investment Association, as of the 29th, investor deposit funds, which are standby funds for the stock market, amounted to 47.4484 trillion won, and the balance of credit loans for stock purchases reached 14.057 trillion won, breaking the record high once again.

This content was produced with the assistance of AI translation services.