Securities Firms Say "KOSPI Could Reach 2800 Level"

Even After Initial Rebound..
Numerous Negative Factors Like Inflation, Exchange Rates, and Interest Rates
Forecast Bands Successively Revised Downward

On the 13th, dealers are working in the dealing room of Hana Bank in Euljiro, Seoul. On this day, the KOSPI index started at 2,913.34, down 3.04 points (0.10%) from the previous session, then turned upward. The won-dollar exchange rate opened steady and has been fluctuating in the high 1190 won range, alternating between rises and falls. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] On the morning of the 13th, the KOSPI showed a strong rebound, but securities experts are cautious. With various negative factors such as rising inflation, depreciation of the Korean won, and interest rate hikes mixed together, they expressed concerns about further declines rather than a recovery above the 3000 level. Major securities firms have lowered their expected KOSPI bands for this month one after another and urged cautious responses.

As of 10:03 a.m. that day, the KOSPI recorded 2,947.63, up 31.25 points (1.07%) from the previous day. Although there was some breathing room above the threatened 2,900 level from the day before, the supply and demand situation is still unfavorable to be optimistic. Foreign investors, who had net sold 2.204 trillion KRW until the previous day this month, also net sold about 100 billion KRW within one hour that morning.

Samsung Electronics, which had plunged 3.5% the day before to fall to the '60,000 won level,' slightly rebounded that morning but has not risen back to the 70,000 won level. SK Hynix, which had surpassed 100,000 won per share, has entered the 90,000 won range this month and is now on a downward path, approaching the 80,000 won level.

Securities Firms Forecast KOSPI Down to 2800

[Image source=Yonhap News]

In the securities industry, there is anxiety about whether the KOSPI can hold the 2,900 level. On the same day, Eugene Investment & Securities lowered the year-end KOSPI floor to 2,900 and forecasted it could drop to 2,800 next year. Just last month, they expected the KOSPI to hold at least the 3,050 level but now see the rebound foundation as weak. Huh Jae-hwan, head of Eugene Investment & Securities’ Global Macro Team, said, "Due to the decline in operating profit margins within the KOSPI and government regulations on companies, there is a lack of momentum for a rebound. Externally, issues like Evergrande and power shortages are dragging down the Chinese economy, which is hampering the domestic stock market."

On the same day, Korea Investment & Securities also lowered its Q4 forecast. The previous floor (upper limit 3,200) was adjusted from 3,000 to 2,900. Yoo Jong-woo, head of Korea Investment & Securities Research Center, explained, "With the official start of tapering in the U.S., the normalization phase of monetary policy has begun, which has led to a decline in preference for emerging market assets like ours."

NH Investment & Securities recently lowered the KOSPI floor forecast to 2,850 (upper limit 3,100). Kim Young-hwan, a researcher at NH Investment & Securities, analyzed, "The market is currently mixed with concerns that rising commodity prices due to reduced resource production could cause economic contraction, stagflation worries, and fears that rising commodity prices and inflation could accelerate U.S. interest rate hikes." However, he added, "Since the recent inflation increase is not due to demand improvement, concerns about U.S. rate normalization may be valid, but there is no need to worry about stagflation."

Still Need to Watch... Expecting a Rebound

On the 13th, dealers are working in the dealing room of Hana Bank in Euljiro, Seoul. On this day, the KOSPI index started at 2,913.34, down 3.04 points (0.10%) from the previous session, then turned upward. The won-dollar exchange rate opened steady and has been fluctuating in the high 1190 won range, alternating between rises and falls. Photo by Moon Honam munonam@

Some securities firms prefer to wait and see. They have not abandoned expectations for rebound potential. Shinhan Investment Corp. maintained its forecast of the KOSPI at 2,950?3,400 for Q4 presented earlier this month, stating they are "monitoring the stock market." Daishin Securities plans to maintain its year-end forecast of 3,050?3,630 until next week. Lee Kyung-min, a researcher at Daishin Securities, said, "Rather than expecting a trend reversal, it is a time to focus on short-term trading, confirm changes, and pay attention to risk management. If a new upward trend forms after this adjustment process, a better long-term flow could emerge."

Kyobo Securities presented a band of 3,040?3,250 for this month and stated there are no plans to revise it based on recent market conditions. Kim Hyung-ryul, head of Kyobo Securities Research Center, analyzed, "Although there are major negative factors, it should be seen as an attractive low-price investment opportunity. It is necessary to confirm whether the risk of further declines in the U.S. stock market is limited, but economic indicators and corporate earnings are favorable, and additional foreign capital outflows are expected to be limited."

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