We are now in the era of ‘5,000 PPI’ (KOSPI index 5,000). KOSPI jumped more than 30% and surpassed the 5,500 mark in just over a month. Ahead of the long Lunar New Year holiday, Hankyung.com asked stock market tweezers experts to diagnose the current situation of the K stock market, which has risen sharply, and their future response strategies over the course of five episodes. [편집자주]
Jeong Sang-jin, Chief Investment Officer (CIO) of Korea Investment Value Asset Management./Photo = Hankyung DB
“I think it is possible for the KOSPI index to reach 6,500 this year. The domestic stock market has already entered a major bull market thanks to corporate performance growth, improvement in shareholder value, and the government’s reform of the capital market system.”
In an interview with Hankyung.com on the 14th, Jeong Sang-jin, Chief Investment Officer (CIO, Managing Director) of Korea Investment Value Asset Management, said, “This year’s KOSPI index could go up to 6,500 just through circular selling, where investment funds flow from semiconductors to other industries such as shipbuilding, defense industry, and nuclear power plants.”
He said, “This year’s KOSPI operating profit is expected to be 560 trillion won, an increase of about 70% from last year,” and added, “If the narrative surrounding the semiconductor ‘super cycle’ led by the artificial intelligence (AI) boom is not broken, the KOSPI index at 6,500 is a reasonable expectation.”
He continued, “Even in a major bull market, adjustments of about 20 to 30 percent may occur,” and predicted, “The KOSPI index may fall by up to 4,000 points, but from then on, it will rise more firmly and volatility will decrease.”
This year’s noteworthy industries include semiconductors, the existing leading stocks, as well as shipbuilding, defense industry, nuclear power plants, and domestic demand stocks. Managing Director Jeong explained, “Semiconductors will continue to lead, and there may be cyclical selling in shipbuilding, defense, and nuclear power plants.” He added, “In particular, as individual profits from the rise in the stock market appear to have begun to be reflected in consumption, domestic demand may rebound significantly this year.”
The following is a Q&A with Managing Director Jeong.
▷ Is the current KOSPI index level burdensome?
Although the KOSPI index has risen sharply, it is not viewed as a burdensome level. The index doubled in a short period of time, something that has never happened before. There may come a time when you can take a break while receiving adjustments. It is believed that the recent high volatility, such as the successive activation of buy and sell sidecars, is due to the burden of such adjustments.
▷The outlook for this year’s KOSPI index.
In the past major bull market, the index rose about four times from its low point. Assuming this, I think it is a reasonable expectation that the KOSPI index, which started around 2,500 points, will eventually reach 10,000 points. The rate of increase in corporate profits is very steep, and there is no performance decline in most industries. Circular selling will occur not only in semiconductors, but also in shipbuilding, defense, and nuclear power plants, and this alone is expected to allow the KOSPI index to reach the 6,500 level this year. There is a consensus (estimate) that KOSPI’s operating profit will increase by about 70% from 330 trillion won last year to 560 trillion won this year, which is quite possible if the semiconductor ‘super cycle’ narrative is not broken.
▷ There are also concerns about profit concentration at Samsung Electronics and SK Hynix.
Samsung Electronics and SK Hynix account for about 55% of the KOSPI’s expected operating profit of 560 trillion won this year. The other half is created in other industries. If the semiconductor ‘super cycle’ story continues, it may have the effect of supporting investment sentiment. In the past, the semiconductor industry was classified as an economically sensitive industry and was undervalued, but as it has transformed into a structural growth industry due to the artificial intelligence (AI) boom, this level of profit proportion is not a problem.
▷ How should we develop an industry strategy?
It is expected that the semiconductor industry’s upward trend will continue. In such a situation, there may be a circulation of sales in shipbuilding, defense industry, and nuclear power plants. In particular, it is necessary to pay attention to domestic demand. As the stock market has soared recently, it should be said that investors’ spending power has also improved. There is recent news that men’s clothing sales at department stores have turned to an upward trend. Since men’s clothing is the last item to see an increase, it can be seen that there are signs of improvement in consumption. In addition, Korea’s domestic industry itself is being converted to export-oriented. It is positive that domestic products are selling well overseas thanks to the Korean Wave, such as K-pop, which is becoming a global craze.
▷ Cautionary factors after the Lunar New Year holiday are:
There is uncertainty about what kind of monetary policy the nominee for the next chairman of the U.S. Central Bank (Fed), Kevin Worth, will implement. Nominee Wash’s idea is to lower interest rates while carrying out quantitative tightening (QT), but the essence of asset inflation lies in liquidity. Any attempt to reduce this could have a negative impact on asset prices.
Also, no matter how the federal court ruling on the Trump administration’s reciprocal tariffs is concluded, it cannot be good news. Even if it is ruled unconstitutional, President Donald Trump will likely try to impose tariffs based on other provisions of the law. Uncertainty continues to grow in the market. Even if the ruling is legal, profits may be realized due to differences in market expectations.
Go Jeong-sam, Hankyung.com reporter jsk@hankyung.com
date: 2026-02-14 05:01:00
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