The forecast for next year's stock market by major domestic securities firms has been found to hit only 1 out of 10 times on average. Over the past decade, the only firms that accurately predicted the KOSPI index band were Hana Securities and Kiwoom Securities, while the house that fared the worst was identified as KB Securities.
On the 23rd, ChosunBiz analyzed the KOSPI index band forecasts from eight securities firms, including Meritz, Samsung, Shinhan Investment, Kiwoom, Hana, Korea Investment, KB, and NH Investment, from 2015 to 2024. The analysis revealed that out of a total of 80 forecasts made by these securities firms, only 8 times did the actual index fall within an average error of 60 points from the forecasted upper and lower bounds. This means they were correct only 1 out of 10 times. The threshold of 'within 60 points' was set based on feedback from securities industry officials, who noted that the average index band should ideally fall within 2-3% of the actual index to be considered accurate.
Looking at each securities firm, Hana Securities and Kiwoom Securities had the smallest average errors between their forecasts and the actual KOSPI index band most often in the last decade. Hana Securities achieved this twice in 2015 and 2016, while Kiwoom Securities did so twice in 2017 and 2024. Subsequently, Shinhan Investment Securities (2018), KB Securities (2019), Meritz Securities (2020), Samsung Securities (2022), and NH Investment Securities (2023) each achieved first place once. Korea Investment Securities never ranked first.
Conversely, the firm with the largest average errors between forecasts and the actual KOSPI index band was KB Securities. KB Securities ranked last four times—in 2015, 2017, 2022, and 2023. Following this were Kiwoom Securities with three times (2019, 2020, 2022), and Meritz Securities with two times (2016, 2024). Samsung (2018), Shinhan (2016), and Korea Investment Securities (2021) each ranked last once, while Hana Securities and NH Investment Securities did not rank last at all.
The year with the largest gap between the forecasts by securities firms and the actual KOSPI index band was 2022. The average lower bound predicted by these firms was 2,820 points, while the upper bound was 3,350 points. However, the actual annual low was 2,155.49 points and the annual high was 2,989.24 points, resulting in a discrepancy of 512.64 points.
The high point in 2022 was on Jan. 4 at 2,989.24 points. With heightened expectations for the new year, Korean corporations participated in the world's largest consumer electronics and information technology exhibition, CES, at its largest scale ever after a two-year hiatus. However, the anticipated repercussions from the U.S. interest rate hikes were severe. As the year progressed, the won depreciated further, and the rapid tightening by the U.S. Federal Reserve and four consecutive interest rate hikes by the Bank of Korea, along with a subsequent reversal of interest rates between Korea and the U.S., drastically changed the atmosphere. The default case in Gangwon Province, known as the 'Legoland incident,' further led the KOSPI to record an annual low of 2,155.49 points on Sept. 30.
The next year when securities firms' predictions were widely off was 2020, with an average error of 496.73 points. March 2020, which recorded an annual low of 1,457.64 points, was the most frightening time of the COVID-19 pandemic. However, as the year-end approached, hopes for global economic recovery grew due to the U.S. Federal Reserve's unlimited monetary easing and vaccine development expectations, leading to a sharp rebound to 2,873.47 points in December.
Conversely, the year when the actual KOSPI index band was most closely matched was 2015, with a margin of only 61.61 points. Notably, Hana Securities predicted the KOSPI index lower and upper bounds to be between 1,830 and 2,150 points, while the actual annual low and high were 1,829.81 points and 2,173.41 points, respectively. The average error of 11.8 was the most accurate forecast for the KOSPI band over the past decade.
A source in the financial investment industry noted, '2020 and 2022 share a commonality in that they marked the years when COVID-19 first appeared and became endemic.' They explained, 'The difference between the annual high and low points reached as much as 1,415.83 points and 833.75 points, indicating significant volatility.' They added, 'The frequency of unforeseen uncertainties arising in the global economy is increasing,' suggesting that it is becoming increasingly difficult to forecast the KOSPI index.