Morgan Stanley Says KOSPI Could Hit 9,000 Again, Upgrades Korea to Overweight

[Financial News] Morgan Stanley, the global investment bank, upgraded its view on Korean stocks to "Overweight" and said the KOSPI has 36% upside to its target of 9,000 points. With valuation pressure having eased sharply after the recent sell-off, the bank said now is an attractive time to reinvest in the Korean market, especially in artificial intelligence (AI) and semiconductors.
On the 3rd, Morgan Stanley said in a report that it had raised its investment stance on Korean equities from "Equalweight" to "Overweight."
Morgan Stanley said the recent wave of heavy selling in the market was not caused by weaker corporate earnings or deteriorating fundamentals, but by technical adjustments driven by factors such as leverage unwinding.
It added that more than half of excessive leveraged positions, including leveraged exchange-traded funds (leveraged ETFs), hedge fund borrowing, and margin loans held by retail investors, have already been unwound.
As a result, the bank said valuation pressure in the Korean market has eased significantly, creating an attractive opportunity for investors to re-enter stocks tied to AI trading and the semiconductor supercycle.
Morgan Stanley kept its KOSPI target at 9,000 points, which is about 36% above current levels.
The domestic market has seen extreme volatility recently. The KOSPI surged nearly 18% in a single day on the 31st of last month, then fell as much as 5.5% intraday on the 3rd, extending a roller-coaster trend.
Morgan Stanley said this volatility was also temporary and reflected the process of unwinding excessive leverage, not a structural problem in the market. With much of the leverage liquidation now complete, it forecast that corporate earnings and improving conditions in AI and semiconductors are likely to lead the market again.
[email protected] Kim Kyung-min Reporter