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Can struggling KOSPI exceed 3,000 in 2024?

Electronic signboards at Hana Bank in Seoul show the benchmark KOSPI closed at 2,682.52, Monday, up 1.74 percent from the previous trading day. The secondary Kosdaq closed at 844.72, up 0.56 percent. Yonhap

The benchmark KOSPI is struggling, rising only 0.4 percent compared to the beginning of this year, despite strong performances by some corporations and government initiatives to enhance shareholder value.

Such a trend contrasts sharply with other major economies that are witnessing double-digit growth.

According to the Korea Exchange (KRX), Monday, the KOSPI closed at 2,682.52, a 1.74 percent increase from the previous day’s trading. The secondary Kosdaq recorded 844.72, an increase of 0.56 percent.

The KOSPI, which began the year at the 2,600 level, neared 2,800 at one point due to expectations regarding the country’s Corporate Value-up Program and an earnings-driven market. It has since returned to its starting level, continuing its downward trend for two months until May.

According to the KRX, 99 out of 839 companies listed in the KOSPI recorded 52-week lows in May.

Analysts attribute the trend to the slump of several leading stocks such as Samsung Electronics and those related to secondary batteries. Stocks related to exports are also a concern due to the delayed recovery of the Chinese economy. The possibility of KOSPI earnings having already reached a peak has also been posed, as the improvement has continued for over a year now.

Nevertheless, there are high hopes in the securities industry that the stock market can soar above 3,000 during the latter half of this year. NH Investment & Securities even predicted it would reach 3,150, the highest among the forecasts.

The industry cited the potential lowering of key U.S. interest rates during the second half of 2024 as a contributing factor.

The improvement in corporate performance, specifically in the semiconductor industry, is expected to play a key role in the market’s rise.

“As semiconductor performance improves, profit forecasts are being revised significantly upward, and the 12-month forward EPS is rising rapidly. Based on this performance upgrade, we have set the upper limit for the KOSPI at 3,110,” said Lee Kyoung-min, an analyst from Daishin Securities.

The Corporate Value-up Program remains a promising factor supporting the market as well.

In addition to the rise driven by financial, automotive and holding companies in the first half of the year, the government’s forthcoming specific incentive plans are expected to expand benefits to other stocks in the second half.

However, some caution against premature optimism. Along with global economic uncertainties, the U.S. presidential election, scheduled for Nov. 5, is perceived as a risk factor.

“If the cumulative effects of high inflation and high interest rates are greater than the recovery in global demand, the uncertainty surrounding the 추천 second-half performance of KOSPI-listed companies will intensify,” said Kim Yong-gu, an analyst at Sangsangin Investment & Securities. He anticipated the KOSPI to reach 2,900.

The last time that the KOSPI exceeded 3,000 was in December 2021, as the abundant liquidity caused by the COVID-19 pandemic drove the index to an all-time high of around 3,300.

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