JP Morgan raised its 12-month goal for South Korea’s benchmark Kospi index to five,000, saying an AI-powered chip rally and Seoul’s company governance reforms might ship the market to report highs and probably to six,000 in a full-blown bull run.
In a report titled Kospi 5000 on the Playing cards launched Tuesday, the US funding financial institution stated it now expects the benchmark to achieve 5,000 inside a 12 months, up from its earlier two-year forecast, and urged buyers to extend publicity to Korean shares throughout market pullbacks.
Regardless of the latest surge, Korean equities stay undervalued in contrast with their Asian friends, the financial institution famous.
The Kospi’s price-to-earnings ratio stands at 13.2 occasions and its price-to-book ratio at 1.34 occasions, properly under the regional averages of 16.1 and a couple of.15, respectively.
JPMorgan highlighted a robust rebound within the memory-chip cycle and Seoul’s reform agenda as key catalysts, saying semiconductors stay the primary engine of the market’s upside momentum.
The financial institution anticipated that the supply-demand imbalance within the reminiscence market would persist for a while, and shopping for might rotate from semiconductors into the nation’s different sectors, comparable to finance, holding corporations, shipbuilding and protection.
The financial institution named Samsung Electronics Co. and SK Hynix Inc. as its high picks, alongside Hanwha Aerospace Co., Hyundai Motor Co., Naver Corp., Shinhan Monetary Group Co. and Samsung C&T Corp.
The bullish name underscores how quickly sentiment towards Korean equities has improved amid the worldwide artificial-intelligence growth and hovering semiconductor earnings.
THROUGH THE ROOF
The upbeat forecast got here as Korean shares surged to new highs, lifted by a rally in chipmakers and vitality names.
The Kospi jumped 1.8% on Wednesday to shut at an all-time excessive of 4,081.15, with positive factors accelerating after SK Hynix earlier reported report earnings for the third quarter and provided upbeat steering for subsequent 12 months.
SK Hynix soared 7.1% to 558,000 gained ($389.91), pushing its market capitalization above the 400 trillion-won mark for the primary time.
The chipmaker posted an working revenue of 11.38 trillion gained within the July-September interval, up 61.9% from a 12 months earlier, on income of 24.45 trillion gained, up 39.1%.
Its cross-town rival Samsung Electronics shares rose 1% to 100,500 gained apiece.
Samsung C&T, the de facto holding firm of Samsung Group that controls stakes in Samsung Electronics, Samsung Biologics Co. and Samsung Life Insurance coverage Co., surged 11.6%.
BROADER GAINS
Positive factors additionally prolonged to different large-cap names, with Naver up 4.7%, Hyundai Motor Co. rising 3%, Kia Corp. advancing 1.9%, LG Vitality Resolution Ltd. including 0.8% and Hanwha Ocean Co. up 0.3%.
Doosan Enerbility Co. jumped 11.6% on expectations of expanded South Korea-US nuclear cooperation.
The Kospi rally adopted upbeat international sentiment after Nvidia CEO Jensen Huang stated AI chip demand stays robust. His feedback lifted US semiconductor shares in a single day and fueled renewed shopping for in Seoul.
“The Kospi hit one other report as buyers piled into chip, nuclear and battery shares on optimism over the Korea-US summit and Huang’s upbeat remarks on AI demand,” stated Lee Jae-won, an analyst at Shinhan Securities Co.
US President Donald Trump arrived in South Korea on Wednesday for the APEC summit in Gyeongju, elevating expectations that Seoul and Washington will slim variations over their commerce deal throughout a bilateral assembly between the 2 leaders.
In foreign money markets, the Korean gained strengthened, ending at 1,431.7 per greenback, up six gained from the earlier session.
Jennifer Nicholson-Breen edited this article.
