KOSPI Countdown to Surpass Previous High... What Will Drive Further Gains?

S&P 500 and Nasdaq Reach All-Time Highs

"Samsung Electronics and SK hynix's Operating Profit Estimated to Approach 800 Trillion Won This Year"

Expectations for Improved Results in Defense, Shipbuilding, and Robotics

The KOSPI has entered the final countdown to surpass its previous all-time high. Overnight, the New York stock market hit record highs amid renewed optimism over ceasefire negotiations, fueling appetite for risk assets. Now, the market's attention is shifting to the strong fundamentals underpinning the domestic stock market.

On April 16, the KOSPI opened at 6,149.49, up 0.95% from the previous trading day, and reached 6,200.74 as of 10:18 a.m. At the same time, the KOSDAQ was trading at 1,165.99, up 1.18%. The won-dollar exchange rate opened at 1,473.6 won, down 0.6 won from the previous trading day, and was trading at 1,473.8 won.

Amid optimism over ceasefire negotiations, the New York stock market reached new record highs. On April 15 (local time) at the New York Stock Exchange (NYSE), the S&P 500 index closed at 7,022.95, up 55.57 points (0.80%) from the previous session. During the session, the S&P 500 index climbed to an all-time high of 7,026.24, marking the first new record in about two and a half months since January 28. The Nasdaq Composite Index closed at 24,016.02, up 376.93 points (1.59%), hitting its highest level in six months since October 29 of last year.

The New York stock market is continuing its upward trend, overcoming the shock from the Iran war. U.S. President Donald Trump, in an interview with Fox Business on this day, stated, "(The Iran war) will end soon."

First quarter earnings releases also had a positive impact on investor sentiment. Following better-than-expected results from Goldman Sachs, JPMorgan Chase, and Citigroup through the previous day, both Morgan Stanley and Bank of America also beat market expectations. Semiconductor company Broadcom led the gains in technology stocks, rising 4.19% on news of a deal with Meta to expand AI chip production.

In contrast, Micron (-2.0%) and SanDisk (-5.6%) both posted declines, which appears to be the result of a wave of profit-taking following their previous sharp rises. Ji-Young Han, a researcher at Kiwoom Securities, commented on the U.S. stock market: "There appears to be some uncertainty regarding the short-term direction of stock prices," adding, "It would be appropriate to adjust positions after confirming the profitability and guidance of major U.S. big tech and server companies from late April to early May."

As expectations rise for the second round of negotiations between the United States and Iran, the S&P 500 index in the New York stock market hit an all-time high while the domestic stock market also started up nearly 1%. On April 16, at the Hana Bank headquarters dealing room in Jung-gu, Seoul, an employee monitors the stock market and exchange rates. On that day, the KOSPI opened at 6,149.49, up 58.10 points (0.95%) from the previous trading day. Photo by Jo Yongjun

Some analysts believe that a KOSPI level of 7,500 is now coming into view. KB Securities estimates that KOSPI operating profit will reach 792 trillion won this year, driven by improved memory semiconductor performance from Samsung Electronics and SK hynix, and rise to 1,044 trillion won next year. The improvement in earnings is expected to spread beyond semiconductors to other key industries such as defense, shipbuilding, and robotics.

Looking ahead, the memory industry is expected to evolve into a "pre-order, post-production foundry model" similar to TSMC's business structure, serving as a key driver for the revaluation of Korean memory semiconductor companies. Notably, although Samsung Electronics and SK hynix are projected to rank second and fourth in global operating profits this year, their positions are expected to change next year, with Samsung Electronics first, Nvidia second, and SK hynix third.

Dongwon Kim, Head of Research Center at KB Securities, said, "From this month onward, foreign investors are likely to focus on earnings and fundamentals, which will increase interest in the KOSPI market." He added, "Currently, the KOSPI's 12-month forward price-to-book ratio (PBR) is 1.4 times, which is significantly discounted compared to the global stock market average (PBR 3.1 times) and the Asia emerging market average (PBR 2.0 times)." He continued, "Going forward, the KOSPI's PBR multiple will rapidly expand, driven by government measures to vitalize the capital market such as corporate governance reform through amendments to the Commercial Act. Entering a semiconductor-driven earnings upcycle will make Korea an increasingly attractive destination for global investors."

Meanwhile, the semiconductor-led boom is also expected to have a positive impact on the domestic bond and foreign exchange markets. An increase in corporate tax revenue, led by Samsung Electronics and SK hynix, is expected to help ease the burden of government bond issuance going forward. If the government uses excess tax revenues to repay government bonds, the bond market is expected to respond even more positively. In addition, the combined net profit forecast for Samsung Electronics and SK hynix this year is 316.8 billion dollars, accounting for about 75% of Korea's foreign exchange reserves. Considering the mid- to long-term investment plans for the Pyeongtaek P5 and Yongin semiconductor clusters, a substantial inflow of dollars is anticipated, which is expected to contribute significantly to stabilizing the won-dollar exchange rate in the future.

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