"KOSPI Reaches 3000 at Normal Pace... Undervaluation Factors Being Resolved"

Stock Market Rise Not Rapid... Future Investment Sentiment 'Focused'
Korea Discount Being Resolved... Overseas Capital Inflow Expected to Continue This Year

The Korea Exchange and the Korea Financial Investment Association jointly held the "KOSPI 3000 Breakthrough Commemorative Capital Market CEO Roundtable" on the 14th at the Korea Exchange in Yeouido, Seoul.

[Asia Economy Reporter Minwoo Lee] The KOSPI '3000 era' is not a 'bubble' but a process of resolving undervaluation factors in the domestic stock market, according to an analysis. The industrial structure has been reorganized around new industries such as semiconductors and secondary batteries, and it is expected that overseas institutional funds will continue to flow in.

On the 14th, Kim Shin, CEO of SK Securities, emphasized at the 'KOSPI 3000 Breakthrough Commemorative Capital Market CEO Roundtable' jointly held by the Korea Exchange and the Korea Financial Investment Association at the Korea Exchange in Yeouido, Seoul, that "while real assets are not priced low globally, undervaluation has persisted uniquely," adding, "Geopolitical risks, low dividends, corporate governance issues, high earnings volatility, and low stock holdings compared to real estate?these undervaluation factors have shown signs of being largely eliminated over the past year."

He analyzed that the perspective on corporate value itself has now changed. In the past, corporate value was evaluated mainly by traditional price-earnings ratio (PER) and price-to-book ratio (PBR), but recently, performance improvement, technology, and price/earnings to growth ratio (PEG) have become new standards. Kim said, "The paradigm for valuing companies has shifted to focus on the future," and added, "From this perspective, it is problematic to claim that the Korean stock market is a bubble simply because it doubled in one year; considering the 2007 breakthrough of 2000 points, the speed is not that fast."

There is now an expectation for additional growth beyond the 'Korea Discount,' which refers to the undervaluation of the domestic stock market. Taejin Park, CEO of JP Morgan Securities, cited the background of domestic stock market undervaluation as ▲ high volatility in dividends or stock returns ▲ geopolitical factors ▲ weaknesses in corporate governance. Park explained, "The current situation emphasizes whether a premium can be received rather than a discount," adding, "The spotlight on untact (contactless) and IT stocks, Korea's excellent response to COVID-19, and various government policies can provide a premium to the Korean stock market."

He also predicted that overseas funds will steadily flow in the future. Park said, "Last year's stock market rally was driven by individual investors, and overseas institutions, which net sold about 20 trillion won, did not contribute much," and added, "The share of emerging markets in the total assets under management (AUM) of global asset management was 13% ten years ago but is only 7% now, so I think capital inflows into emerging markets will continue this year."

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