J.P. Morgan's surprising outlook: 'KOSPI to reach 5,000 within a year... 6,000 possible'

Global investment bank (IB) J.P. Morgan said it expects the KOSPI index to reach 5000 within a year. It also said that if the market enters a bull market, the index could reach 6000.

According to the securities industry on the 29th, J.P. Morgan said in a report titled 'KOSPI 5000 on the Cards' on the 28th that 'it raised the 12-month KOSPI target to 5000 and, under a bull scenario, judges that it could rise to 6000.' It added, 'We recommend increasing allocations on corrections.'

J.P. Morgan pointed out that 'despite the recent sharp rise, the KOSPI's price-to-earnings ratio (PER) and price-to-book ratio (PBR) are 13.2 and 1.34, respectively, lower than the Asian averages (16.1, 2.15).'

J.P. Morgan highlighted the sharp rebound in the memory semiconductor market and the government's corporate governance improvement efforts. J.P. Morgan explained that 'the imbalance between supply and demand in semiconductors is likely to continue for a considerable period.' It added, 'After semiconductors, rotation could occur into finance, holding companies, shipbuilding and defense.'

J.P. Morgan mentioned Samsung Electronics, SK Hynix, Hanwha Aerospace, Hyundai Motor, Naver, Shinhan Financial Group and Samsung C&T as its top picks.

Reporter Shim Seong-mi smshim@hankyung.com