Citigroup Upgrades Investment Rating on South Korean Stock Market to 'Neutral'

Bloomberg News reported on the 1st that Citigroup has upgraded its investment rating on the stock markets of South Korea and Brazil to neutral.

Yonhap News Agency

In contrast, Citigroup downgraded its rating on the Taiwanese stock market to 'neutral', and on the Mexican and Saudi Arabian stock markets to 'sell', respectively.

Citigroup assessed that the South Korean stock market appeared to withstand the Trump-induced tariff-driven global trade turmoil better than other Asian competitors.

The company added that although analysts are lowering their earnings forecasts due to U.S. tariff policies, companies listed on the KOSPI are expected to show stronger earnings growth compared to companies included in other major Asian indices.

Citigroup also noted that South Korea's export ratio to gross domestic product (GDP) is lower than that of Taiwan and other Southeast Asian countries, which may reduce the tariff shock on the earnings of South Korean companies.

In addition, Citigroup pointed out that the South Korean stock market was the first among Asian countries to recover from the stock market downturn triggered after U.S. President Donald Trump announced reciprocal tariffs on the 2nd of last month.