KOSPI EPS growth expected to accelerate
“Selling pension funds and inflation are not at the level of concern”
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Global Investment Bank (IB) Goldman Sachs announced that it has raised its KOSPI forecast to 3,700 points. Although the KOSPI is currently in a difficult period, it is a position that it maintains a positive view of the Korean market.
On the 23rd, Goldman Sachs raised its KOSPI index target to 3,700 and adjusted its 2021 earnings forecast to 59%, 5 percentage points higher than the market forecast (54%). The reason for the adjustment was that the global growth rate is expected to exceed the market forecast.
Tim Mou, senior strategist at Goldman Sachs Asia, predicted, “As semiconductors, consumer goods, materials, and industries increase the global economic growth rate, and the stock price of new economic companies rises, the increase in EPS will accelerate further.”
Goldman Sachs raised the KOSPI’s target price-to-earnings ratio from 12.5x to 13.1x, forecasting that the low interest rate will support the market. In addition, it is expected that the increased value will be supported by the fact that the composition of the market has changed around the digital economy showing a high growth rate.
As for the preferred industries, C-critical (economic sensitive stocks) and digital economy were selected over the economic defense sector. Next, he advised to pay attention to stocks related to economic recovery, the 4th industrial revolution, and green energy.
They expressed an opinion that the’overhang (quantity waiting for large-scale sale)’ due to rebalancing of the domestic stock market such as pension funds is not excessively worrisome.
Concerns over the resumption of short selling were also eliminated. “Previously, in May 2009 and November 2011, the market was weak at the beginning, but soon rose”, explained Mowoo. He predicted that “Korea’s chemical, technological hardware, semiconductor and financial sectors will achieve the highest levels in the world, surpassing inflation concerns.”
/ Reporter Shin Hanna [email protected]
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