JP Morgan Maintains "Overweight" on Korean Stocks as Citigroup Downgrades to "Neutral" After One Year

JP Morgan Maintains KOSPI Target at 12,500
Citigroup: "Valuation Concerns and Rising Volatility"

Global investment banks (IBs) have recently presented mixed investment opinions regarding the sharp decline in the Korean stock market.

Employees are monitoring the stock market and exchange rates in the dealing room at the Seoul Hana Bank headquarters on the 21st, as the KOSPI successfully rebounded and closed at 6,747.95. Photo by Yonhap News

On July 21, in a report titled "Trends in the Korean Stock Market Deleveraging Process," JP Morgan stated, "While the corporate fundamentals of the Korean market remain solid, intense deleveraging (reduction of leverage) has pulled down stock prices." The KOSPI experienced a steep correction over the past month, falling approximately 28% from its recent high.

JP Morgan added, "A correction that initially began with typical concerns about fundamentals and sector rotation was amplified through leveraged ETFs, and recently, there has been a notable wave of hedge funds unwinding their positions."

The investment bank also noted that investments in artificial intelligence (AI) and data centers remain robust, maintaining its overweight view on Korean stocks and keeping its 12-month KOSPI target at 12,500.

 

In contrast, Citigroup downgraded its investment view on the Korean stock market from "overweight" to "neutral" for the first time in a year, according to a July 19 report. Citigroup stated, "Although corporate fundamentals in the Korean market remain favorable, recent stock price increases have heightened valuation burdens and volatility." The bank added, "From a tactical perspective, we are lowering our investment stance to neutral."

Citigroup upgraded its investment view on the Chinese stock market from neutral to overweight, reflecting policy momentum and the possibility of improved corporate earnings.

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