It has been forecasted that if interest rate cuts, policy momentum, and exchange rates align, the KOSPI index could reach 3,725.
An Ji-sun, a researcher at Eugene Securities, noted on the 12th that based on the valuation of the KOSPI market and macroeconomic indicators, this is the case.
Currently, the KOSPI index stands at a trailing price-to-earnings ratio (PER) of 10.6 times, slightly above the 10-year long-term average of 9.54 times. However, An noted that if corporate performance improves while interest rates and exchange rates stabilize, the risk burden could decrease. Particularly, An explained that considering the performance cycle position of KOSPI-listed corporations, it is currently in the initial stage of a recovery leading to expansion.
An recommended sectors such as artificial intelligence (AI) software, semiconductors, energy, and securities that have policy-driven upward momentum in a bull scenario. He also indicated that industries such as shipbuilding, utilities, finance, and hotel/recreation that are expected to benefit from interest rate cuts are positive. An advised, 'Among these sectors, it would be good to select stocks that are seeing upward earnings adjustments and have foreign demand.'
An explained that even if the KOSPI index remains within a 'box range,' it could fluctuate around the levels of 3,234 to 3,354. He suggested responding to the box range with relatively stable sectors like finance and holding companies, or cyclical stocks with potential short-term price increases, such as semiconductors, secondary batteries, defense, and aerospace.
An stated that while the likelihood is low, the KOSPI index could drop to 2,771 if a slowdown in the U.S. economy, tariffs from a trade war, or geopolitical conflicts arise.
An noted that in a bear scenario, it is necessary to expand the cash ratio to 40% and include dollar assets to respond swiftly, and recommended employing a low-priced purchasing strategy in the valuation range below 0.9 times the price-to-net worth ratio (PBR).