Shinyoung Securities' research center issues a report close to a "self-critique" every year-end. Analysts who have analyzed the stock market in Yeouido for years or even decades gather to present an outlook that considers domestic and global economic and industry issues as well as political variables, but it goes awry every year.
Kim Hak-kyun, head of research at Shinyoung Securities, said in a report titled "My mistakes in 2025" on the 30th, "At least around this time last year, I could not imagine a scenario in which the KOSPI rose into the 4000s," and "More than the fact that prices rose more than expected, it was baffling that the combination of 'a weak won' and 'a rising KOSPI'—which had not coexisted historically—occurred at the same time."
Other securities firms were in the same boat. This year the KOSPI index broke through the 4,200 level to set a record high, but among domestic securities firms that released stock market outlooks at the end of last year, not a single one expected the KOSPI to surpass the 4,000 level.
At the end of last year, the trading range for the 2025 KOSPI index presented by domestic securities firms was 2,250 to 3,200 points. With domestic political uncertainty heightened by the martial law situation at the end of last year and Donald Trump being elected U.S. president, bearish views outweighed optimism at securities firms amid significant external risk factors.
At the time, there were cautious predictions that the Korean stock market was in an absolutely undervalued phase and could be re-rated, but that view was in the minority. The majority opinion was that as internal and external uncertainty grew, Korea's economic growth would stall and the pace of corporate profit increases would likely slow.
In particular, securities firms expected that even if the KOSPI index recovered, its peak would be around 3,000 points. Even then, the KOSPI targets of 3,100 to 3,200 points presented by SK Securities and Shinhan Investment's research center were the bull-case scenario.
But as the KOSPI index posted a monumental 75% gain this year, research centers at securities firms were left embarrassed. This year's KOSPI rise is the third-largest on record after 1987 (93%), when the "three lows" boom of low dollar, low oil, and low interest rates peaked, and 1999 (83%), the height of the dot-com bubble.
Early in the year, market conditions were tough as securities firms had projected. As the newly inaugurated President Trump waged a hard-line tariff war even against allies, the KOSPI index retreated to the 2,280 level. Concerns grew that corporations' profitability would deteriorate immediately, and pressure for a weak won—which directly affects foreign capital inflows—intensified.
But after Lee Jae-myung was elected president, the mood in the market completely changed. As the new administration, which put forward "KOSPI 5000" as a campaign pledge, pushed strong market-boosting measures, the KOSPI index recovered the 3,000 level and then sprinted toward 4,000 points. This year the KOSPI index finished trading at 4,214.17.
The artificial intelligence (AI) frenzy that swept the world also gave wings to our market. Foreign capital concentrated in Samsung Electronics and SK hynix, which have leaped into global players, and as power demand from surging AI data centers was projected to grow, shares of power equipment companies such as Hyosung Heavy Industries and Doosan Enerbility soared. Defense companies such as Hanwha Aerospace and bank and securities sectors with high dividend payout tendencies also posted sharp gains.
Securities firms struggled to keep up with the rapidly rising index. As share prices surged, they repeatedly revised the 2025 KOSPI outlooks they issued last year. Reports revising targets for the KOSPI index and major stocks poured out throughout the year. Because of this, some raised questions about whether index forecasts are useful at all.
A researcher at a securities firm's research center said, "We examine countless variables to present an outlook, but we cannot help being influenced by the market mood at the time we forecast," and "Looking at the basis and judgment behind the outlook, rather than the specific figures, helps with investing."