[Click eStock] "The Driving Forces Behind KOSPI's Rise in 2020: Corporate Earnings, US-China Trade Agreement, and IT"

[Asia Economy Reporter Oh Ju-yeon] The main driving forces expected to lift the KOSPI this year include corporate profit growth, the US-China trade agreement, and the recovery of the IT and semiconductor industries.

On the 2nd, Daishin Securities projected the 2020 KOSPI range to be 2100?2480, forecasting that the KOSPI will continue its upward trend driven by corporate profits (Fundamental), the US-China trade negotiations (Trade Deal), and the recovery in IT and semiconductor demand (IT).

Researcher Lee Kyung-min stated, "Global trade is also showing signs of recovery, and corporate profits are creating a gradual upward trend," adding, "We expect a bullish trend in global risk assets and stock markets in 2020 based on fundamental momentum."

He analyzed that Korea is also showing visible recovery in leading economic indicators and 12-month forward EPS (Earnings Per Share), and among major global countries, Korea is expected to experience the largest base effect inflow from a fundamental perspective.

Additionally, the easing of uncertainties regarding the US-China trade dispute is expected to support the recovery and improvement of global fundamentals. Researcher Lee emphasized, "The direction of the US-China trade dispute changed with the tariff reductions on China in the Phase 1 US-China trade agreement," adding, "If expectations for economic recovery lead to upward revisions of economic growth forecasts, concerns about continued economic slowdown until 2020 will shift to expectations of an economic turnaround." He also noted that the scheduled Phase 2 trade agreement will further enhance the positive outlook on fundamentals in 2020.

The recovery in IT and semiconductor demand is also cited as a factor increasing the attractiveness of the KOSPI. Global smartphone (5G) sales volume and semiconductor revenue forecasts have already begun to be revised upward, which highlights the appeal of Korea’s economy, industry, and stock market, which are highly dependent on IT and semiconductors.

Researcher Lee diagnosed, "IT and semiconductor demand recovery is expected in 2020," and "The upward trend of the KOSPI is expected to be led by these sectors."