“KOSPI could reach OOOO within 2 years”… Major U.S. investment bank ‘JP Morgan’ makes astonishing prediction

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JP Morgan: "If Governance Reform Succeeds, KOSPI Could Reach 5000"

The world's largest investment bank, JP Morgan, has highlighted the potential improvement in South Korea's capital markets, predicting that the KOSPI could rise by more than 50% in the next two years.

It is analyzed that President Lee Jae-myung’s focus on capital market reforms, including amendments to the Commercial Act, is stimulating the expectations of foreign investment banks.

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Lee Jae-myung’s 'Policy Rally'… KOSPI Nears All-Time High

On the 11th (local time), Bloomberg reported, citing JP Morgan's latest report, that "South Korea is one of the most attractive investment destinations among Asia and emerging markets, currently maintaining an 'overweight' opinion."

JP Morgan forecasts, "If President Lee Jae-myung's corporate governance reform is implemented effectively, the KOSPI could rise more than 50% from its current level to reach the 5000 mark."

As of last Friday, the KOSPI recorded 3175.77, nearing an all-time high. Since President Lee’s inauguration, the KOSPI has shown a rising trend known as the 'policy rally.'

Expectations of Resolving the 'Korea Discount'… Foreign Investors Seeking Entry Points

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JP Morgan particularly noted President Lee's pledge to achieve the KOSPI 5000 during his term and his commitment to resolving the chronic undervaluation problem of the Korean stock market known as the 'Korea Discount.'

The report evaluated, "President Lee Jae-myung is pushing for institutional reforms, such as the Commercial Act, to enhance corporate responsibility and transparency, which sends a very positive signal to foreign investors."

As a result, JP Morgan upgraded its investment opinion on the Korean stock market from 'neutral' to 'overweight.'

"Buy Opportunities During Adjustments… Forecasting 3200-3500 Range by Year-End"

JP Morgan stated, "As long as policy reforms proceed smoothly, even if temporary market adjustments occur, they could present buy opportunities," and added, "Short-term risks such as global tariff conflicts, slowing growth rates, and bond market volatility could actually stimulate value buying."

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They also suggested that the trading band for the KOSPI for the remainder of the year could settle between 3200 and 3500 points.

However, JP Morgan noted, "Ironically, the recent net buying by foreign investors has shown a slight weakness compared to early 2024," interpreting this as a signal that interest in the Korean market is not waning, but that investors are waiting for a more attractive entry point.

Image credits: Jamie Dimon, JP Morgan CEO / Getty Images Korea, News1, President Lee Jae-myung / News1

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