Global investment bank (IB) Macquarie projected on the 14th that the KOSPI index at 4,000 could be not just a peak but the beginning. It cited the reason that this upward trend is based on structural changes.
According to the financial investment industry on the 14th, Macquarie evaluated this in a report titled 'Korean Stock Strategy: Don't miss out.'
Macquarie first emphasized policy changes. Given that the Lee Jae-myung administration has a strong will to induce the movement of funds from the real estate market to the stock market, Macquarie explained that stock market-friendly measures will continue.
Macquarie explained that following the amendment of the Commercial Act, which expanded the duty of loyalty of directors to 'the company and shareholders,' there are also follow-up measures being pursued such as mandatory buyback of treasury shares, separate taxation of dividend income, and inheritance tax relief.
Macquarie noted the inflow of funds from foreign and individual investors as another supporting element for the Korean stock market. Foreign investors reversed from a net sell of $22 billion from June 2024 to May this year to a net buy of $2.5 billion in June.
Individual funds also flocked to the U.S. stock market from 2023 to the first half of 2025 but returned to the domestic stock market from June this year. Macquarie diagnosed that the strengthening of the won against the U.S. dollar became a significant turning point, and the inflow of funds from foreign hedge funds also started after the full resumption of short selling.
Macquarie pointed out that the market capitalization of the KOSPI is still lower than that of developed countries, at about 90% of the gross domestic product (GDP), and noted that the foreign ownership ratio in the KOSDAQ market is still in a stagnant phase.
Macquarie advised expanding the proportions of defense, shipbuilding, nuclear power, electricity, entertainment, and medical beauty among domestic industries. Macquarie viewed these sectors, referred to as 'Neo Industrial' and 'K-Wave,' as likely to lead structural growth. It also explained that they can benefit from geopolitical separation flows by demonstrating an advantage in supply chains compared to other countries.
Previously, global IB JP Morgan also stated that the KOSPI index could rise to 5,000 within two years and adjusted its investment opinion on the Korean market from 'neutral' to 'overweight.'