KOSPI Set to Rise Further If Selected as MSCI 'Watch List' in June

"If Included in MSCI Developed Markets Index, 12,000 Is Within Reach"
Still 10% Undervalued Compared to Emerging Markets Index

On the 27th, when the KOSPI index started the trading day in a bearish trend for the first time in seven sessions, the exchange rate, KOSPI, and KOSDAQ indices were displayed on the index status board at the Hana Bank dealing room in Jung-gu, Seoul. 2026.02.27 Photo by Dongju Yoon

With the KOSPI surpassing the 6,000-point mark, expectations for further gains are mounting. The securities industry believes that not only will the KOSPI stabilize above 6,000 points, but it could also aim for 8,000 points within this year. The upcoming designation of South Korea as a “watch list” for potential inclusion in the MSCI Developed Markets Index this June is expected to further fuel the KOSPI’s growth. There are even projections that, if actual inclusion is announced next year, the index could reach as high as 12,000 points.

Nvidia’s Impact: KOSPI Declines After Seven Consecutive Sessions

On February 27, the KOSPI opened at 6,197.49, down 1.74% from the previous trading day. After six consecutive sessions of gains until the previous day, the index is experiencing a correction. This was influenced by the Nasdaq’s 1.18% drop in the New York stock market overnight.

Nvidia's decline of more than 5% dragged down the overall index. Although Nvidia announced better-than-expected quarterly results the previous day, investors took this as an opportunity to sell. The sharp increase in long-term mandatory purchase amounts for memory semiconductors and growing doubts about overheating in the artificial intelligence (AI) industry were also cited as reasons for the intensified selling.

Although the KOSPI is undergoing a correction, optimism still prevails among securities firms. This is due to continued improvement in the earnings of memory semiconductor companies such as Samsung Electronics and SK hynix, as well as the KOSPI’s valuation remaining lower than that of developed markets. Both domestic and international securities firms estimate that, based on this year's expected KOSPI net profit, the 12-month forward price-to-earnings ratio (PER) will remain at 11 times, and the price-to-book ratio (PBR) at around 2.1 times.

With expectations for undervaluation to be resolved, it is believed that the KOSPI could climb as high as 8,000 points within a year (Nomura). Hana Securities (7,900 points), JP Morgan (7,500 points), and NH Investment & Securities (7,300 points) have also raised their KOSPI targets in succession.

There are also projections that, if the South Korean stock market succeeds in joining the MSCI Developed Markets Index, the targets could be revised even higher. The MSCI Index is a global stock index administered by global investment bank Morgan Stanley, and institutional investors worldwide use it as a reference to allocate investment funds to each country. The government is working to have South Korea designated as a “watch list” candidate in MSCI’s annual market classification announcement in June. If designated as a “watch list” country, South Korea could be included in the developed markets index as early as next year.

Currently, South Korea is included in the MSCI Emerging Markets Index, but if it moves into the developed markets index, a large inflow of foreign investment is expected, along with further upward momentum for the index. The Korea Economic Research Institute previously estimated that if South Korea is included in the MSCI Developed Markets Index, up to $54.7 billion (KRW 78 trillion) in foreign investment could flow into the market.

‘Big Bang’ Expected if Included in the MSCI Developed Markets Index

If the KOSPI catches up with the valuation of the MSCI Developed Markets Index, the upper bound for the KOSPI could well exceed 10,000 points. The 12-month forward PBR of the MSCI Developed Markets Index is 3.95, while that of the KOSPI is only about half that level. If the KOSPI’s PBR rises to 3.95, the index could theoretically approach 12,000 points.

Even compared to the MSCI Emerging Markets Index, the KOSPI remains undervalued. The 12-month forward PBR of the MSCI Emerging Markets Index is 2.34, while that of the KOSPI is 2.1, making it about 10% cheaper.

Lee Youngwon, a researcher at Heungkuk Securities, emphasized, "The valuation of the Korean market, measured by 12-month forward earnings per share (EPS), is still undervalued—so much so that it falls below the 10-year historical average. The Korean market remains at a lower level compared not only to the developed market average but also to the emerging market average, so the risk from further increases is not significant."

The key driver for further KOSPI gains is semiconductor performance. It is expected that continued improvement in the earnings of Samsung Electronics and SK hynix, which are leading the KOSPI’s rise, along with sustained stock price growth, will open up further upside for the KOSPI.

Notably, Samsung Electronics recently ranked 12th among all listed companies worldwide in terms of market capitalization, following a surge in its share price. According to CompaniesMarketCap, as of the morning of February 27, Samsung Electronics’ market capitalization, including preferred shares, stood at KRW 1,416 trillion. Its ranking rose from 14th last week to 12th in just one week.

The global leader in market capitalization is Nvidia, with a market cap equivalent to KRW 6,426 trillion. Apple ranks second with KRW 5,741 trillion, followed by Google’s parent company Alphabet in third place with KRW 5,324 trillion. Among Asian companies, only Taiwan’s TSMC, with a market cap of KRW 2,776 trillion, ranks above Samsung Electronics, at 6th place.

U.S. big tech firms Meta (7th), Tesla (9th), and Broadcom (10th) all have higher market capitalizations than Samsung Electronics, while Warren Buffett’s Berkshire Hathaway is in 11th place. With Berkshire Hathaway’s market cap at KRW 1,554 trillion, Samsung Electronics could overtake it if its stock price rises by just 8–9% more.

This month alone, Samsung Electronics’ share price has soared 38%, with its market capitalization swelling by nearly KRW 400 trillion. The securities industry expects Samsung Electronics’ earnings to exceed expectations, making further share price gains highly likely. Global investment bank Macquarie has set a target price of KRW 340,000 for Samsung Electronics, projecting more than 50% upside from current levels. Macquarie predicted, "With the proliferation of AI services, memory semiconductors are gaining prominence, leading to unprecedented surges in DRAM and NAND flash prices. Samsung Electronics is expected to benefit greatly from this trend."

Han Donghee, a researcher at SK Securities, who set the highest domestic target price at KRW 300,000, emphasized, "There is a need to re-evaluate Samsung Electronics considering its capacity to respond to demand, its recovery in high-bandwidth memory (HBM4) competitiveness, and the improving utilization rate at its foundry division." Ryu Hyeonggeun, a researcher at Daishin Securities, also stated, "Taking into account the sharp increase in memory semiconductor prices, we are raising Samsung Electronics’ operating profit forecast for this year from KRW 171 trillion to KRW 201 trillion and increasing our target price to KRW 270,000."

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