The Kospi, which has been surging nonstop, has finally entered the 5,000-point era. Market attention is focused on whether the "5,000-point" level will establish itself as a sustainable new support floor or if a sharp correction due to short-term overheating will begin. Global investment banks (IBs) and major domestic securities firms are pouring out "rosy" forecasts, including the possibility of reaching the 6,000-point mark, but warnings are also growing on the ground about the need to cautiously monitor the continuity of foreign investor demand and the direction of the U.S. Federal Reserve’s monetary policy. Global IBs and securities firms predominantly view this rally as the start of a "new normal." JP Morgan presented 5,000 as its base scenario at the end of last year, assessing that 6,000 is possible depending on conditions. Macquarie also evaluated, "Strong earnings growth, abundant liquidity, and government policies favorable to the stock market are aligning, allowing the index to approach the 6,000-point mark." Goldman Sachs also added momentum by formalizing 5,000 as its forecast for this year. The common key factor cited by IBs for the index’s rise is that this bull market is based on "earnings growth." In a recent report, Goldman Sachs analyzed, "Strong earnings upgrades are emerging, particularly in technology sectors including semiconductors," and confirmed, "This uptrend is not a liquidity-driven rally but an earnings-based one." The explanation is that the expansion of capital expenditure (CAPEX) triggered by the spread of artificial intelligence (AI) is driving up average selling prices (ASPs) for memory chips, and structural changes are occurring as supply shortages overlap. Reflecting this trend, JP Morgan recently raised its target stock price for Samsung Electronics to 200,000 Korean won and for SK Hynix to 1,000,000 Korean won. Expectations for resolving the chronic "Korea discount" are also strongly supporting the 5,000-point era. Goldman Sachs stated, "The Korean stock market is benefiting from domestic reforms such as corporate governance improvements," and assessed that the current phase of the Korean market is similar to the early stages of Japan’s stock rally in 2020, driven by strengthened shareholder return policies such as reduced dividend taxes and share buybacks. Hana Securities recently raised its upper target for the Kospi to the 5,600-point level. This figure is based on the strong earnings growth visibility of semiconductor sectors led by Samsung Electronics and SK Hynix. Lee Jae-man, a Hana Securities researcher, acknowledged some overheating signs in current stock prices but diagnosed, "With U.S. tech sector CAPEX growth projections at 27%, rising semiconductor prices, and a high exchange rate environment aligning, earnings growth visibility is very high." Hana Securities assessed the current market conditions as similar to the "super cycle" of 2016–2018. Applying the 1.08 ratio of stock price returns to earnings growth from that period to the current cycle, the projected 189% increase in semiconductor net profits from 2024 to 2026 could translate to a 204% stock price rise. Even though stock prices have already surged by 143%, the analysis suggests a remaining 61% upside. Considering the semiconductor sector’s 38% share of the Kospi’s market capitalization, the index could rise approximately 23% further to reach 5,600 points. (ICE SEOUL)

Fonte notizia: The Chosun Daily