The KOSPI index recorded an increase of 28% in the first half of the year (January to June). It was the strongest bull market since 1999. However, in the past 10 years, the KOSPI index has shown poor performance in the second half of the year. KB Securities predicted on the 1st that there would be a short-term adjustment in the second half of this year due to cooling off and the United States' tariff policy. Nevertheless, it projected that a long-term bull market could be maintained thanks to the "weak dollar."
Lee Eun-taek, a researcher at KB Securities, noted on the 1st in a report titled 'The strongest first half since 1999, will it break the curse of the second half this time?' that the KOSPI index's increase in the first half of this year was the sixth highest since 1975. Especially, excluding cases of steep declines followed by rebounds due to economic recession, it has been the strongest since the "three lows boom" from 1986 to 1988.
The 'buying' by foreign investors acted as a driving force behind the rise of the KOSPI index. The drop in the exchange rate of the won against the U.S. dollar supported this. In the first half of this year, the won/dollar exchange rate fell by 8%, demonstrating the third strongest appreciation of the won in history.
There are also elements of uncertainty. The KOSPI index has experienced the 'curse of the second half.' Looking at the last 10 years, the average decline of the KOSPI index in the second half, excluding 2020, is 3.7%. The mutual tariff waiver period announced by U.S. President Donald Trump (until July 8) is also nearing its end.
However, in 9 out of the 10 years when the KOSPI index rose significantly in the first half, there was also an upward trend in the second half. The average increase was also high at 13.4%. This researcher said that the high probability of upward trends in the second half following a strong first half was "data to reference for fun." He added, "If the trend of a weak dollar continues, I believe the long-term bull market will be maintained," and noted that "the dollar showed the most severe weakness since 1986 in the first half of this year, and it is clear that something has started."