"KOSPI 5000 is within reach... Buy more if a correction comes this summer," surprising outlook

Global investment bank JP Morgan has forecast that the KOSPI index could reach as high as 5000 within the next two years. For the Korean market, JP Morgan raised its investment recommendation from 'neutral' to 'overweight.'

According to Bloomberg News and others on the 13th, JP Morgan stated in a report released on the 11th that "the Korean stock market is a key overweight market among Asian and emerging economies," and accordingly upgraded its investment outlook.

Mixo Das, Asia equity strategist at JP Morgan, analyzed, "If corporate governance reform proceeds smoothly in Korea, the KOSPI index could rise more than 50% from current levels within two years," and added, "Recent amendments to commercial law and other measures are revitalizing the Korean stock market."

He cited as grounds for upgrading the outlook President Lee Jae-myung's pledge to achieve a 'KOSPI index of 5000' during his term, as well as efforts to resolve the so-called 'Korea discount' (undervaluation of Korean stocks). He explained that, if corporate governance reform goes smoothly, the valuation of the Korean market—which has been undervalued compared to other Asian stock markets such as Japan and Taiwan—could rise further.

JP Morgan also cited as an example the recent withdrawal of a division plan by PharmaResearch, saying, "Recently in Korea, there is momentum for additional corporate restructuring reforms, regardless of political affiliation." Last month, PharmaResearch announced a plan to set up an aesthetic business in a new subsidiary, also named 'PharmaResearch,' but reversed the decision on the 8th in response to opposition from investors and lawmakers inside and outside the National Assembly.

The KOSPI index has risen 32.38% so far this year, closing at 3175.77 on the 11th. JP Morgan projected that the KOSPI would remain within the 3200–3500 range within the year.

Das, the strategist, commented, "Ironically, foreign buying in the Korean stock market (KOSPI) is much weaker compared to early last year," and analyzed, "This is because foreign investors are reconsidering their entry timing."

JP Morgan sees a market correction in the short term as a potential buying opportunity. Das noted, "During the summer, volatility could hit global and Korean stock markets due to tariff concerns, slowing growth, and movements in the bond market," adding, "As long as corporate governance reform continues in Korea, we recommend taking advantage of any corrections to buy."

Reporter Han Kyul Seon, always@hankyung.com