Global Securities Firms Say Korean Stock Market Has Hit Bottom

A positive outlook for Korean stocks is provided by major global securities companies. Despite foreigners’ recent record selling, major global securities firms said, "Next year's economy will rebound and company profits will increase.” 

At the end of last month, JP Morgan said the Korean stock market will start to surge next year and advised investors to give more weight to the Korean stock market. "Korean shares have been undervalued and the Korean stock market is one of the most valuable markets in the world," said James Sullivan, JP Morgan, head of stock analysis for Japan and Asia. He also stressed that "Korea is one of the key markets worth investing in from the end of the year to early next year." He went on to say, "Korea's tech stocks will also see high returns as demand increases," adding, "The strongest names such as Samsung are on our list of our most preferred stocks." For Kakao, he also recommended increasing investment.

Goldman Sachs has recently adjusted its investment opinion on the Korean stock market from “market average” to “expanded weight.” In the Asia-Pacific Portfolio Strategy report, Goldman Sachs said, “The global economic recovery and the semiconductor sector's profits are expected to recover.”

Goldman Sachs said, “The tech hardware sector will lead the recovery in Korea and Taiwan due to the normalization of memory prices and increased supply and demand for memory products,” forecasting that demand for 5G smartphones will also increase. Expecting Korean firms to perform well next year, Goldman Sachs said that Korean firms’ EPS growth will bounce from -33 percent this year to 22 percent, next year’s highest level among Asian countries. Goldman Sachs also explained that "economically sensitive sectors such as automobiles, industries and materials will contribute to the growth of Korea's EPS."

Macquarie Securities also said at a meeting last month, “The Korean stock market has hit bottom in a cycle,” and it is time to buy rather than sell stocks. Hwang Chan-young, CEO of Macquarie Securities, said, “At the end of 2017, I had a negative view of the Korean stock market, but I changed my outlook from August. He explained, “As far as the economic cycle is concerned, the year’s fourth and fourth quarters have bottomed out and will only improve next year.”