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S Korea Stocks Up 87% YTD; Foreign Investors Pull USD11.5 billion Since May; KB Securities Lifts KOSPI 2026 TP to 10,500
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Bloomberg data show that as of May, foreign investors have net sold USD11.5 billion of S Korea equities. Following unprecedented sell-offs in February and March, May may mark the third-largest single-month sell-off on record. Local retail investors in S Korea, who missed last years rally, continued to enter the market, driving the KOSPI to extend its gains in 26. The index has surged 87% in 26, outperforming all global peers. Year to date, overseas funds have withdrawn nearly USD48 billion from the S Korea equity market, on track to set a full-year record for capital outflows. The KOSPI rose 1.25% to 7,941 today (14th). Heavyweight Samsung Electronics advanced 4.1%, while SK Hynix slipped 0.4%. KB Securities today sharply raised its 2026 KOSPI TP from 7,500 to 10,500. The brokerage said expanding investment in AI infrastructure is driving upward earnings revisions for sectors such as semiconductors. Earnings improvement for the KOSPI is outpacing the indexs rise, helping to ease valuation pressure. Addressing concerns about a potential bubble burst, KB Securities said the probability remains limited. While rapid short-term gains may trigger market anxiety, a bubble does not inevitably burst solely due to large price increases. The firm noted that bubble collapses typically require clear signals such as an economic cycle reversal or a sharp rise in interest rates, and such signals appear unlikely in the near term. Kim Dongwon, head of research at KB Securities, said that although the market has already priced in strong expectations for 2026 operating profit to grow YoY to around three times, reaching KRW919 trillion, the KOSPI is currently trading at 7.9x price-to-earnings (PER), 1.8x price-to-book (PBR) and 25% return on equity (ROE), representing a discount of more than 30% to the average level of Asian emerging markets. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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