"Korea, top-priority investment destination"…Overseas IBs repeatedly reassess

"Analysis: Entering a structural uptrend"

Global investment banks (IBs) are issuing successive positive assessments of the Korean stock market. They analyze that the 'K-stock market' has entered a structural upward phase thanks to market structural improvements, governance reform policies, and the easing of global liquidity.

According to industry sources on the 11th, JPMorgan recently recommended increasing exposure to Asian markets in a report and "named Korea the top-priority investment destination." JPMorgan said, "Policy environments worldwide are shifting from tightening to expansion, and investment in artificial intelligence (AI) is expanding," adding, "Accordingly, Asian markets are likely to remain hot over the next 6–12 months." It added, "By country, Korea is the most preferred market, followed by India, Hong Kong/China, Taiwan, and ASEAN," and "as picks, we recommend SK hynix and Hyundai Motor Company."

Hong Kong-based IB CLSA recommended the Korean market even more strongly. CLSA analyzed that "policy support from the Lee Jae-myung administration combined with active investment by individual investors has made it possible to resolve the 'Korea discount'," and said "the KOSPI index has more than 30% upside potential." It projected that the KOSPI could reach the 4,500 level on the assumption that the dividend income tax rate falls to 25%. Recommended sectors included most of Korea's major industries such as semiconductors, finance, shipbuilding, nuclear power, holding companies, and K-content, and top picks included SK hynix, HD Hyundai Heavy Industries, and Samsung Biologics. Goldman Sachs also added to the optimism, highly rating Korea's global competitiveness in shipbuilding and nuclear power.

As perspectives on the Korean market changed, foreign capital flows also shifted. Foreigners have net bought 3.3103 trillion won in the KOSPI market so far this month.

Samsung Electronics (1.9074 trillion won) and SK hynix (668 billion won) ranked first and second, followed by Hanwha Aerospace (365.6 billion won) and Hyundai Rotem (215.8 billion won). HD Hyundai Electric (173 billion won), a power equipment stock, was fifth. K-culture related stocks such as CJ (71.6 billion won) and APR (67.9 billion won) also ranked high among net purchases. An asset management company official said, "Previously, foreign capital concentrated on large semiconductor stocks, but recently the choices have broadened to defense, power equipment, shipbuilding, and nuclear power," adding, "It is likely that foreign buying momentum will continue for the time being."

Reporter Han-shin Park phs@hankyung.com