[사설] Conditions for the’Bull Rally’ in the KOSPI 3000 Era

2020 was a record year in the history of the domestic stock market. In March of last year, the KOSPI plunged to 1457 due to the fear of Corona 19, but on December 30, the KOSPI closed price of 2873.47, and the reported price was newly written. Last year, the KOSPI increase rate was 28.3%, ranking first among the G20 countries.

According to the financial investment industry, there are eight securities companies that have raised their KOSPI forecast this year to more than 3000. Considering the competitiveness of the manufacturing industry, the Korean stock market is undervalued compared to neighboring countries. In fact, the stock price-to-earnings ratio (PER) of domestic listed companies is still lower than in the US, Taiwan, and China. It is analyzed that if the global economy recovers due to the spread of the Corona 19 vaccine, there is still a high possibility that earnings will improve mainly in manufacturing industries such as semiconductors.

The KOSPI 3000 era is a good thing for companies to raise funds smoothly and for individuals to increase their assets. It is belated that Maeil Economic Daily has reached the KOSPI 3000 era only 7 years after launching the campaign to open the’stock price 3000 era’ in February 2014, but some conditions are required to continue the’bull rally’. First of all, the basic strength of the Korean economy must be strengthened. Last year, Korea’s economic growth rate took the lead in 37 countries of the Organization for Economic Cooperation and Development (OECD), but there are forecasts that it will only grow around 3% this year, which is less than the global average (5.2%). This is why the government must change the anti-business policy stance and eliminate regulatory obstacles for innovation growth. It is also important to secure a stable foreign buying base by incorporating the Korean stock market into the MSCI (Morgan Stanley Capital International) advanced countries index. Ahead of the resumption of short selling in March, measures to eradicate illegal short selling such as real-time monitoring are also needed.

Now, due to the ultra-low interest rate and fiscal expansion policy, floating funds in the market are unprecedented in the stock market. In particular, there are many aspects of overheating as 2030 generations who gave up their dreams of building my own home jumped into the stock market to the extent that it is called the Donghak Ant Movement. In such a situation, if the global economy shows signs of recovery, the stock market may rapidly cool down as governments recover liquidity. It is better to approach it with a long-term investment rather than aiming for an instant.
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