On the 12th, the KOSPI smashed through the 5,400 and 5,500 levels in succession, extending an unprecedented streak of records. Despite daily alarms of all-time highs, the securities industry is putting weight behind the view that the KOSPI is undervalued.

Closing prices are displayed on the dealing room board at the Woori Bank headquarters in Jung-gu, Seoul, in the afternoon on the 12th. /Courtesy of News1

On the day, the KOSPI closed at 5,522.27, up 3.13% (167.78 points) from the previous session. It opened by surpassing 5,400 for the first time ever, then broke through 5,500 intraday, and finished at a record high. The KOSPI has jumped more than 31% in 30 trading days this year.

Global investment banks (IBs) have already taken a KOSPI 6,000 era as a given since last month and issued aggressive outlooks. Each time the index hit a record high, "peak" debates flared, but major IBs instead kept raising targets and bet on further gains.

JPMorgan, after setting 6,000 as the base-case KOSPI scenario at the end of last year, offered a bold view that a bull market could open the way to the 7,500 level. Goldman Sachs last month raised its 12-month target to 5,700 points, signaling that the "bull-market rally" would continue.

Domestic securities circles also joined the optimism, saying, "The index rose, but the size (earnings) grew even more." Lee Kyung-min, a researcher at Daishin Securities, said, "The KOSPI forward earnings per share (EPS), which was 409 points at the end of last year, surged during earnings season to 576.4 points."

They added, "The 12-month forward price-earnings ratio (PER) is 9.3 times based on yesterday's close," and explained, "Even converted to a KOSPI of 5,500 points, it stands at 9.5 times, which is in undervalued territory." The KOSPI's forward PER is below the 10-year long-term average of 10.3 times.

An official at a major asset manager also said, "It seems right to take a bullish view on the KOSPI's direction," adding, "As corporations continue to release results, full-year operating profit estimates are being steadily revised upward."

However, there is advice to watch global external variables. A major asset manager official said, "One risk is how tariff-related policy is wrapped up at the U.S.-China summit," adding, "There are also external variables such as a Russia-Ukraine cease-fire."

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