End of Bad News? Still Too Cheap... "KOSPI 10,000 Within Reach in Second Half, Semiconductors Will Lead the Rally" [Urgent Market Outlook]

KOSPI Surges Past 8,000 on Prospects of US-Iran Ceasefire
Semiconductors to Lead the Charge Toward 10,000 Points as Earnings Outlook Remains Strong
Rotation Expected Into Machinery, Shipbuilding, Securities, and Banking Sectors

On the 12th, the KOSPI once again surpassed '8000 points' (KOSPI 8000 points) fueled by expectations of the end of the Middle East war. The photo shows the dealing room of Hana Bank in Jung-gu, Seoul, in the morning. Photo by Yonhap News

With the possibility of an end to the conflict between the United States and Iran increasing, there are growing predictions that the KOSPI could realistically reach the 10,000-point milestone. As the Strait of Hormuz reopens, negative factors that had pressured the Korean stock market—such as high oil prices and a strong dollar—are receding. In addition, expectations for improved corporate earnings, particularly for semiconductor companies, remain strong, leading to forecasts of further gains in the market.

On June 12, the financial investment industry named semiconductors as the sector most likely to drive the KOSPI into the 10,000-point era. According to the Korea Customs Service, semiconductor exports from June 1 to June 10 totaled $11.068 billion, representing a 205.8% surge compared to the same period last year. This is the highest performance ever recorded for this ten-day period. Semiconductors now account for 38.7% of total exports, up 15.1 percentage points from a year ago. Thanks to explosive demand for high-bandwidth memory (HBM) for artificial intelligence (AI) servers and high-performance DRAM, semiconductor exports have been breaking historical monthly records throughout this year.

Market participants expect the improvement in the semiconductor industry to continue for the foreseeable future. Global investment bank Goldman Sachs recently raised its upper projection for the KOSPI this year to 12,000 points, stating, "The memory semiconductor super cycle will continue," and diagnosing that "the Korean stock market remains undervalued."

Noh Geunchang, head of the Research Center at Hyundai Motor Securities, explained, "Profit growth centered on semiconductors will likely be enough to usher in the era of a 10,000-point KOSPI within this year," adding, "As the year progresses, confidence in the sustainability of future profits in the semiconductor sector will increase, thanks to long-term agreements (LTAs) for memory semiconductors and other factors."

Some analysts suggest it would not be a bad idea to pay attention to sectors outside of semiconductors that are expected to see improved earnings in the second half of the year. There is also the possibility that positive momentum starting from semiconductors could spread to other industries. Han Jiyeong, a researcher at Kiwoom Securities, stated, "Industries such as machinery and shipbuilding, which are expected to improve based on order backlogs, as well as sectors like securities and banking, which have high expectations for shareholder returns, are worth watching as part of a rotational play," adding, "The KOSDAQ market has also underperformed the KOSPI by a significant margin, so there is room for optimism about its performance in the second half of the year."

Yang Jiwhan, head of the Research Center at Daishin Securities, analyzed, "For the KOSPI to settle above the 10,000 mark, it must move away from an excessive concentration in semiconductors," and added, "There is ample possibility that leading industries with a virtuous cycle relationship with semiconductors could emerge in the second half."

However, some warn against excessive investments, such as using leverage, since stock prices have surged rapidly in a short period and concerns about a semiconductor 'peak-out' (a reversal after reaching a high point) have emerged. Recently, share prices plunged after earnings forecasts for U.S. AI semiconductor companies like Broadcom and Oracle fell short of market expectations.

An official at a securities firm said, "Concerns over overheating in technology stocks, especially in the United States, are gradually increasing," and added, "Some believe that large-scale bond issuances by big tech companies such as Google, Amazon, and Meta to fund AI investments are also signs of a potential peak-out."

This content was produced with the assistance of AI translation services.