Eight research center heads from major Korean securities firms forecast the KOSPI index will trade in a band between 7,300 and 12,600 during the second half, according to a Chosun Biz survey. The forecast follows a sharp correction after the KOSPI hit record highs in the first half, driven by earnings upgrades in semiconductor and non-semiconductor sectors. Yoon Seok-mo, Samsung Securities Research Center Head, provided the most optimistic outlook at 8,400–12,600, while Hwang Seung-taek of Hana Securities cited next year's net profit estimates to support a 7,300–11,450 range. The correction has been attributed to profit-taking and concerns over reduced AI investment by US Big Tech, rather than structural weakness in Korean equities.
Chosun Biz surveyed research center heads from KB, Shin Young, Mirae Asset, Daishin, Samsung, Kiwoom, Meritz, and Hana Securities. Yang Ji-hwan of Daishin Securities cited earnings upgrades for both semiconductor and non-semiconductor companies to support a 7,500–11,500 forecast. Lee Jin-woo of Meritz Securities stated that continued upward revisions in earnings estimates will gradually limit downside volatility, projecting the same 7,500–11,500 range. Kim Dong-won of KB Securities maintained the firm's existing KOSPI target of 10,500 for the year.
Foreign Selling Attributed to Tactical Rebalancing Among AI Markets
Research center heads characterized foreign investor selling as profit-taking and portfolio rebalancing rather than a structural exit from Korean stocks. Lee Jong-hyung of Kiwoom Securities noted that 90% of foreign net selling in the first half was concentrated in semiconductor stocks, describing it as typical rebalancing-driven profit-taking in the sector. Lee Jin-woo of Meritz Securities observed that despite net selling, foreign ownership ratios have been rising, interpreting the activity as rebalancing at peak levels rather than Korea weight reduction.
Kim Dong-won of KB Securities stated that Korea, Taiwan, Japan, and the US—all top performers in global stock markets this year—share a common link to AI. He explained that capital exiting Korea and Taiwan has moved to relatively underperforming Japan and the US, representing a reallocation within AI investment countries rather than a shift in sentiment toward the AI industry. Yoon Seok-mo of Samsung Securities noted that foreign investors have historically taken profits in markets that have risen more, such as Taiwan and Korea.
Kim Hak-kyun of Shin Young Securities highlighted that domestic capital inflows have been the real force sustaining the market. He stated that money movement from banks and insurance into stocks has been very strong this year, with new fund inflows into equity funds and direct investment totaling 133 trillion won. He explained that domestic capital absorbed record foreign selling, allowing the market to hold.
Pension Fund Selling Impact Deemed Limited by Analysts
Concerns that the National Pension Fund will mechanically sell large volumes in the second half due to weight adjustments following the first-half index surge were met with assessments that the market can absorb the impact. Samsung Securities estimates showed that the National Pension Fund's domestic stock weight was 21% at the end of March but rose to 30.8% recently due to index gains. Yoon Seok-mo stated that considering strategic and tactical asset allocation discretion (maximum 29.8%), the fund will need to reduce its stock weight by about 1 percentage point by year-end, describing it as not a small amount but not burdensome.
Yang Ji-hwan of Daishin Securities explained that pension fund trading has historically had limited impact on domestic stock market movements. He stated that when reflecting strategic and tactical allowance ranges, the excess weight shrinks to around 1 percentage point, and while rebalancing selling pressure may increase above the 8,300 level, the influence of pension rebalancing on the market is limited and should be viewed as a neutral variable.
Park Yeon-joo of Mirae Asset Securities noted that the National Pension Fund's basic policy is to minimize market shock, viewing the impact as temporary supply slowdown rather than a shock. Lee Jin-woo of Meritz Securities assessed that while the pension fund is unlikely to become an additional buyer, considering first-half average daily trading volume (approximately 35 trillion won) and the pension's daily selling limit, the downside supply impact will not be significant. Hwang Seung-taek of Hana Securities flagged that some selling volume may emerge during quarter-end and month-end rebalancing in the short term, potentially amplifying volatility at specific points. Lee Jong-hyung of Kiwoom Securities diagnosed a possibility that it could partially reduce the upside of large-cap stocks.
Earnings and Fundamentals to Drive Second-Half Direction
Research center heads agreed that while the second-half market will experience short-term volatility amid foreign and pension fund supply dynamics, the key factor determining direction will ultimately be corporate earnings and fundamentals. Yang Ji-hwan of Daishin Securities stated that strong Q2 earnings and bond yield and dollar stabilization due to oil price level-down will be the drivers for KOSPI level-up in July and August, adding that volatility expansion due to weakened investor sentiment and supply anxiety should be used as an opportunity to increase positions.
Center heads noted that while the upper range for the index in the second half is open, high-volatility price swings will continue due to the semiconductor sector's unprecedented weight in the KOSPI. Kim Hak-kyun of Shin Young Securities pointed out that Samsung Electronics and SK Hynix currently account for approximately 57% of KOSPI market capitalization, noting that the structure of the two stocks belonging to the same semiconductor sector and moving together based on industry conditions amplifies market volatility. He stated that semiconductors are a representative cyclical sector with large changes in earnings and profit estimates, and this structure itself is increasing market volatility.
Hwang Seung-taek of Hana Securities also judged that increased volatility due to deepening dependence on the two large-cap stocks and expanded ETF supply influence is unavoidable. Lee Jin-woo of Meritz Securities raised the possibility that volatility will continue for the time being due to the impact of single-stock leverage. Lee Jong-hyung of Kiwoom Securities stated that 12-month forward earnings estimates for major sectors including semiconductors are being maintained solidly.
FAQ
What KOSPI range did Korean securities research heads forecast for the second half?
Eight research center heads from major Korean securities firms forecast the KOSPI will trade between 7,300 and 12,600 in the second half, with Yoon Seok-mo of Samsung Securities providing the most optimistic outlook at 8,400–12,600 and Hwang Seung-taek of Hana Securities citing a 7,300–11,450 range based on next year's net profit estimates.
Why are foreign investors selling Korean stocks according to the survey?
Research center heads characterized foreign selling as tactical rebalancing among AI-leading markets rather than structural exit. Lee Jong-hyung of Kiwoom Securities noted 90% of foreign net selling concentrated in semiconductors as typical rebalancing profit-taking, while Kim Dong-won of KB Securities explained capital moved from Korea and Taiwan to relatively underperforming Japan and the US within AI investment countries.
How will National Pension Fund selling affect the Korean stock market in the second half?
Analysts assessed the impact as manageable. Yoon Seok-mo of Samsung Securities stated the fund will need to reduce stock weight by about 1 percentage point by year-end, which is not burdensome, while Yang Ji-hwan of Daishin Securities noted pension rebalancing influence on the market is historically limited and should be viewed as a neutral variable.
