Global Investment Bank (IB) Goldman Sachs predicts that the KOSPI will rise to the 3700 level by the end of this year. It is a whopping 500 points higher than the previous 3200.
Goldman Sachs analyzed this way on the 23rd, saying that given the global economic recovery this year, the earnings improvement of Korean companies will become apparent. Resumption of short selling was not expected to have a significant impact on the share price rise.
Timothy Mo Goldman Sachs Asia Pacific stock strategist advised in the report that “we need to overweight Korea’s business cycle stocks and 4th industrial revolution related stocks.” This confirms the existing position once again.
Goldman Sachs raised its forecast for Korean companies’ net profit this year to 59%, 5 percentage points higher than the market forecast (54%).
At the same time, it is predicted that economically sensitive stocks such as semiconductors, free consumer goods, and materials will also benefit from companies related to the 4th industry.
Goldman Sachs raised KOSPI’s target price/earnings ratio from 12.5x to 13.1x, saying that low interest rates will support the market. The change in the composition of the market centered on the digital economy was also expected to support the increased value.
Resumption of short selling is expected to have little market impact. I cited the case of resuming short selling in 2009 and 2011.
Goldman Sachs said, “The Korean market showed a higher rise than other markets when inflation expectations rose from low levels.” “In this phase, chemicals, technology, hardware, semiconductors, and financial stocks showed high returns,” he analyzed.
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