On the 25th, as the KOSPI index exceeded the 3100 mark, KB Securities adjusted its 12-month target for the KOSPI upward to 3700. This marks a two-week period since it raised the target to 3240 on the 11th of this month.
In a report titled 'KB Stock Strategy, 12-Month Target Raised: Stock Market Entering Bull Market, Next is Historical High,' published on the 25th, KB Securities suggested raising the KOSPI target index to the 3700 level for the next 12 months.
KB Securities analyzed that the Korean stock market has entered a bull market based on valuation reassessment, driven by government policies and the strength of the won.
Lee Eun-taek, a researcher at KB Securities, noted, "The Korean stock market has been showing a super bullish phase, with a 35% surge in just two and a half months from the KOSPI's low on April 7th (2328 points)," and explained, "The key drivers of the bull market are expectations regarding government capital market reform policies and the weakness of the dollar (strength of the won)."
He continued, "If the government's structural reforms in the capital market, including amendments to the Commercial Act, are realized and the trend of dollar weakness persists, the stock market will secure additional upside potential."
However, he pointed out that technical indicators have entered a state of short-term overheating. The possibility of a resurgence of tariff threats from U.S. President Donald Trump is also increasing. Additionally, there could be a gap between government policies and market expectations, indicating that there are significant short-term risk factors to consider over the summer and fall.
Nevertheless, it is expected that the market's risk appetite will resume by the end of the year, as the U.S. Federal Reserve (Fed) is anticipated to lower interest rates in the fourth quarter. It is also likely that the tariff conflict will move toward resolution by year-end, and budget reflections related to tax cuts will intensify.
KB Securities identified ▲ finance ▲ nuclear power ▲ defense as leading sectors in the bull market. Its preferred stocks include Doosan Enerbility, Hyundai E&C, Korea Investment Holdings, Samsung Securities, HD Korea Shipbuilding & Offshore Engineering, and MNC Solution.
Kim Dong-won, head of research at KB Securities, stated, "While we must be aware of short-term risks such as the possibility of technical adjustments due to entering short-term overheating and uncertainty regarding tariff risks, from a long-term perspective, we anticipate a continuation of the bull market driven by valuation reassessment and a breakthrough of historical highs."