Kim Yongbeom: "KOSPI 7,500 Can't Be Explained by Old Metrics... Now Even 10,000 Is a Realistic Path"

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Kim Yongbeom, policy chief at the Blue House, commented on the KOSPI reaching the 7,500-point level, saying, "We need to consider whether the index itself is odd, or if our measuring stick has simply become outdated," and added, "Even the figure of 10,000 is starting to move from mere fantasy into a realistically attainable path."

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On May 8, through a post on his Facebook page, Kim noted, "Despite ongoing global geopolitical instability, the KOSPI has reached 7,500 points," offering his assessment.

Kim outlined several factors behind the recent stock market rally, including exports and trade balance, semiconductor profit outlook, GDP statistics, and changes in the tax revenue structure. He stated, "The preliminary GDP growth rate for the first quarter of this year was 1.7%, nearly double the Bank of Korea's forecast of 0.9%," and added, "Exports in April increased by 48% year-on-year, and if we look solely at semiconductors, the figure exceeds 173%."

He continued, "None of these numbers come from an ordinary economic cycle," and explained, "At the very least, the market is beginning to imagine a phase that is hard to explain using the conventional benchmarks of economic cycles."

Kim especially highlighted the increase in corporate profits as the core reason for the KOSPI's rise. "Stock prices are ultimately a function of earnings," he said. "According to the Korea Exchange data, the total operating profit of KOSPI-listed companies jumped 60% from 122 trillion won in 2023—a difficult year for semiconductors—to 195 trillion won in 2024, and is set to rise another 25% to 245 trillion won in 2025."

"Looking at these numbers, it is arithmetically convincing why the KOSPI stands at 7,500 now," he said. "If you trust the earnings outlook, then the number 10,000 is also starting to shift from simple fantasy into a path that is actually within reach."

However, Kim cautioned against attributing this stock market rally solely to semiconductors. "Explaining the current KOSPI rally only through semiconductors is an excessive oversimplification," he said, adding, "With the revision of the Commercial Act and improvements in corporate governance becoming reality, some of the structural causes of the Korea Discount are starting to be alleviated."

Kim specifically mentioned directors' fiduciary duties to shareholders and the strengthening of minority shareholder rights. "No matter how large the profits, if there is distrust in corporate governance, stock prices are discounted," he explained. "That discount is beginning to be lifted." He added, "Besides, various forces are at work, including foreign capital inflows, expectations of a stronger won, and the spread of shareholder return culture. Semiconductors triggered all these trends, but they are not the whole story."

He pointed out that the time lag between the rapidly growing market and the policy system that follows could become an issue. "The market has already started to price in these changes, but macroeconomic statistics and the policy system are not structured to keep up in real time," he said.

He also noted that, due to the nature of the semiconductor industry, GDP statistics may reflect real changes with a delay. Kim explained, "For products like HBM, where performance, integration, and energy efficiency improve simultaneously, it is becoming more difficult to separately measure price increases and real production growth," and added, "On a nominal basis, we are seeing historically high operating profits, but real GDP may appear relatively ordinary—hence the gap."

"At this point, trade balance, export data, and corporate operating profits provide the fastest picture of reality," he said. "The market is already moving based on those numbers, but policy can only respond belatedly as it waits for confirmed GDP and finalized statistics."

He predicted that this trend could have a direct impact on future fiscal operations. "If the semiconductor boom continues through 2027, it is highly likely that tax revenues in 2026 and 2027 will reach historic levels," Kim said. "Taking into account not only the corporate taxes of Samsung Electronics and SK hynix but also the income tax of high-earning semiconductor professionals and the ripple effects of an expanded trade surplus, we could see a record-breaking tax surplus accumulate."

He also projected that the revised economic outlook for 2026, set to be released in the second half of this year, will become the "first inflection point." Kim said, "Depending on how high that outlook goes, the direction of the 2027 revenue forecast and total budget will change," adding, "The key issue is not optimism or pessimism itself, but how flexibly the policy system can absorb an industry shift of a scale that is difficult to explain using existing frameworks."

On the 7th, as the KOSPI index surpassed the 7500 point level in early trading, continuously hitting new highs, the status of the domestic stock market was displayed on the electronic board in the dealing room of Hana Bank Headquarters in Jung-gu, Seoul. On the same day, the won-dollar exchange rate began trading at 1448.6 won, down 6.5 won from the previous trading day. Photo by Jinhyung Kang, May 7, 2026.

In this context, Kim also recalled the past experience where revenue forecasts failed to keep up with industry realities during previous semiconductor cycles. "Although an unprecedented tax surplus occurred in 2021 and 2022 due to the post-COVID semiconductor boom, revenue forecasts and budgets did not fully keep up with reality," he said. "Conversely, in 2023 and 2024, as market conditions declined, a tax revenue shortfall emerged."

He went on to say, "Revenue and budgets move one step behind the actual industry cycle," and warned, "This cycle could be much larger than before, and if we stick to conventional approaches, the margin of error in our response could become even greater."

Kim concluded, "What we need to re-examine now may not be the index itself, but rather the way we interpret it," and questioned, "While new numbers are already appearing in the market, are we still trying to understand them with outdated instincts and standards?" He emphasized, "At the very least, it is becoming increasingly clear that the current phase is not simply an extension of an ordinary economic cycle."

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