Overseas funding banks that when stored Korean equities at arm’s size at the moment are scrambling to catch up as South Korea’s benchmark Kospi inventory index surged previous 4,200, setting a brand new document excessive and rating as the best-performing main inventory index of the yr.
Driving the shift is a mixture of easing US tariff threat, ongoing optimism over synthetic intelligence and a world reappraisal of Korea’s industrial and tech champions.
In an indication of the altering temper, a number of main world banks just lately upgraded their outlooks on Korean shares, fueling expectations that extra international traders may comply with go well with.
Switzerland’s UBS led the cost this week, issuing a bullish report on shares of HD Hyundai Group, Korea’s industrial powerhouse, in accordance with the securities business on Monday.
The financial institution upgraded HD Hyundai Heavy Industries Co. to Purchase from Impartial and almost doubled its goal worth to 725,000 gained ($507.42), calling the shipbuilder’s valuation removed from stretched given its shift towards protection and navy manufacturing.
It additionally lifted HD Korea Shipbuilding & Offshore Engineering Co., the group’s intermediate shipbuilding holding firm, to 640,000 gained, up 88% from its earlier estimate.
UBS’s turnaround follows final week’s US-South Korea tariff accord, which is predicted to speed up the so-called “Make American Shipbuilding Nice Once more (MASGA)” initiative, a venture aimed toward revitalizing the US shipbuilding business with Korean participation.
After months of negotiations, the 2 nations struck a remaining commerce deal at a summit between South Korean President Lee Jae Myung and US President Donald Trump in Gyeongju, Korea.
UBS stated HD Hyundai Heavy Industries trades at about 20 occasions anticipated 2028 earnings, properly under its Korean protection friends that fetch as much as 29 occasions, leaving ample room for enlargement.
AUTOS AS TOP PICKS ON COST CUTS AND US SALES
Automakers are additionally again in favor.
Macquarie raised its goal on Hyundai Motor Co. to 300,000 gained from 260,000 gained, crediting Korea’s largest carmaker’s value financial savings of roughly 1 trillion gained pushed by its improved manufacturing effectivity and supply-chain optimization.
The Australian financial institution added that Hyundai’s increasing hybrid lineup has additionally given it a aggressive edge within the US market.
Financial institution of America was equally upbeat about Hyundai’s sibling firm, lifting Kia Corp.’s worth to 160,000 gained from 116,000 gained, saying the automaker is poised to interrupt out of its buying and selling vary.
AI MOMENTUM LIFTS LG
Enthusiasm has unfold to LG Group, the place a number of models are anticipated to learn from the AI {hardware} increase.
HSBC raised the goal worth of LG Innotek Co. to 290,000 gained from 220,000 gained, citing the corporate’s better-than-expected third-quarter earnings and regular iPhone element demand that would maintain its momentum into the fourth quarter.
The financial institution expects the corporate’s earnings to outperform business estimates by way of 2027.
CLSA additionally boosted LG Electronics Inc.’s goal inventory worth to 110,000 gained from 94,000 gained, pointing to its fast-growing data-center cooling programs enterprise as a structural revenue driver within the AI period.
It additionally raised LG Show Co. to 16,000 gained from 11,000 gained, highlighting improved profitability from its enterprise restructuring.
FOREIGN FLOWS COULD KEEP MOMENTUM ALIVE
Analysts say these upgrades may appeal to further international capital inflows into Korean equities, reinforcing the rally that started in mid-2025.
Abroad traders have bought greater than 17.8 trillion gained value of Korean equities since July, serving to gasoline the market’s rally.
“The tone from international brokerages has shifted decisively,” stated the top of a Seoul-based asset supervisor. “They’re anticipated to proceed paying shut consideration to Korean shares.”
On Monday, the nation’s benchmark Kospi inventory index hit a recent historic excessive of 4,221.87, up 2.8% from the earlier session after extending its profitable streak for 4 classes in a row.
Shopping for curiosity remained concentrated in large-cap shares, led by Samsung Electronics Co. and SK Hynix Inc., which collectively accounted for about 30% of whole Kospi turnover on Monday.
Because the Kospi climbed to document highs, brokerages have raised their forecasts for 2026, reflecting rising confidence in Korea’s market momentum.
Yuanta Securities Co. has lifted its Kospi band projection to three,800-4,600, LS Securities Co. raised its higher goal to 4,500 from 4,100 and Daishin Securities Co. stated the index may attain the high-4,000 vary.
Earlier, KB Securities Co. and Korea Funding & Securities Co. had set higher targets at 5,000 and 4,600, respectively, about 18% above present ranges.
Analysts count on semiconductors to stay the chief driver of good points.
But some strategists warning that a lot of subsequent yr’s earnings optimism could already be priced in.
Others warn of a 10-15% correction after the market’s fast ascent.
“If a pullback comes, semiconductors and shipbuilders stay the sectors to observe,” stated Kim Younger-il, head of technique at a Seoul-based funding middle.
