Less than three months after the KOSPI broke through 6,000, the benchmark is on the verge of surpassing 7,000, with four out of 10 CEOs at Korea's top brokerages raising their sights to say KOSPI 8,000 is achievable within the year. Analysts say the combination of ceasefire expectations in the Middle East and an earnings rally has driven an unusually rapid advance, effectively establishing 7,000 as the new support level for the KOSPI. The brokerage CEOs cited three top priorities for improving the market's fundamentals: expanding global market competitiveness through measures such as inclusion in the Morgan Stanley Capital International (MSCI) Developed Markets Index, enhancing shareholder value, and strengthening corporate competitiveness.
In a survey conducted by Seoul Economic Daily on Oct. 3 of the CEOs of Korea Investment & Securities, Mirae Asset Securities, NH Investment & Securities, Samsung Securities, KB Securities, Hana Securities, Meritz Securities, Shinhan Securities, Kiwoom Securities, and Daishin Securities, four projected the KOSPI would exceed 8,000 points, with one CEO citing a potential high of 8,800. For the KOSDAQ, currently trading around 1,200, most CEOs said a rise to 1,500 was possible. Among the five who offered KOSDAQ forecasts, four projected 1,500 or higher (with a peak of 1,570), while the remaining one projected above 1,300.
The reason major Korean brokerage CEOs set the KOSPI's upper range as much as 30 percent above current levels (around 6,600) lies in earnings upgrades centered on semiconductors. All 10 survey participants cited improving semiconductor earnings as a driver of the market's rise. The CEO of Brokerage A explained, "Despite geopolitical risks, semiconductor sector earnings have improved far more than expected, and with attractive valuations, share prices are tracking the fundamentals."
Policy shifts and capital flows also supported the rally. On a multiple-response basis, six cited policy changes such as the revised Commercial Act, while five pointed to the "money move" from deposits to equities as a driver. The CEO of Brokerage B said, "With market returns rising relative to low interest rates, funds are shifting from bank deposits to the stock market," adding, "Individual investor trends have moved from single stocks to exchange-traded funds (ETFs), expanding passive fund inflows." Indeed, net assets in Korea's ETF market have swelled rapidly from 174 trillion won at the end of 2024 to 297 trillion won at the end of last year and 427 trillion won at present. The CEOs agreed that long-term capital is flowing into retirement pension accounts centered on ETFs, forming a more stable supply-demand base than in the past.
Views diverged on whether the semiconductor rally will continue. Six said chips would continue to lead the market. They cited rising memory demand from expanded artificial intelligence (AI) investment and the broadening of long-term supply contracts, which are dampening cycle volatility compared with the past. The CEO of Brokerage C said, "AI investment is still in the early stages, and as long as memory demand continues to grow, the semiconductor-led trend will continue." Four, however, raised the possibility of a slowdown in share prices in the second half. Their analysis is that if memory prices stop rising, semiconductor shares could move sideways.
Nine out of 10 CEOs picked AI and semiconductors as their most preferred sectors. The view reflects a judgment that semiconductor demand will rise structurally as generative AI expands to agent AI and further to physical AI. The CEO of Brokerage D said, "There are risks from high oil prices and inflation, but earnings in the semiconductor sector should be able to offset them."
Four CEOs picked secondary batteries and clean energy as their second-most preferred sectors, citing rising power demand from AI data center expansion and expectations of a sector turnaround. Shipbuilding, defense, and infrastructure, along with new industries such as biotech and robotics, were also mentioned as promising investment areas. The CEO of Brokerage E noted, "The fact that the KOSPI's price-to-earnings (PER) ratio is low means there are attractive entry sectors beyond semiconductors," adding, "The potential for rotation to operate frequently also needs to be considered." The KOSPI's 12-month forward PER currently stands at 7.34 times, lower even than the low of 7.52 times during the COVID-19 pandemic.
The brokerage CEOs emphasized that earning recognition for a "Korea Premium" to justify the sharply higher index is most needed. A prime example is inclusion in the MSCI Developed Markets Index to establish a base for attracting high-quality global investment and secure upward momentum for the index. Analysts say that inflows from developed-market index-tracking funds, which are largely long-term and stable in nature, could help ease the high volatility characteristic of the Korean stock market.
The fund-type retirement pension system the government is pursuing was also cited as a key condition for the market's qualitative growth. In addition, CEOs pointed to the need for consistent expansion of shareholder returns, easing excessive reliance on semiconductors, and improving corporate governance. The CEO of Brokerage F said, "We need to secure long-term supply and demand through the establishment of a retirement pension fund system." If the share of equities in total retirement pension assets rises through the introduction of the fund-type system, it would also help absorb future selling pressure from the National Pension Service.
