There is an analysis suggesting that the KOSPI has entered a valuation expansion phase after breaking through the 3,000-point level, which had been considered a psychological resistance line. It is explained that a re-evaluation of stock price levels is underway as liquidity and the risk premium decline simultaneously.
On June 24, Yang Haejung, a researcher at DS Investment & Securities, stated, "The KOSPI has surpassed the long-standing resistance level of 3,000 points, and is now entering the valuation expansion territory," adding, "The main risk in the valuation expansion phase is increased volatility."
She continued, "The factors that drive valuation expansion tend to react sensitively to the macro environment," explaining that "interest rates and exchange rates are representative examples."
Yang analyzed that the primary reason valuation expansion has become possible is a significant decline in the Korea market risk premium, driven by changes in intrinsic value factors.
She said, "The likelihood of amendments to the Commercial Act has increased, raising expectations for expanded shareholder returns, and expectations for both increased dividends and separate taxation are being reflected," and assessed, "Expanding dividend income, which does not rely solely on capital gains from stock investments, lowers the risk premium of stocks as risky assets."
She further stated, "If we assume that a price-to-book ratio (PBR) of 1 is achievable due to liquidity and the decline in the risk premium, the index could reach around 3,200 to 3,300 points," emphasizing, "While actual performance needs to be confirmed, based on current expectations, the situation is not very bad." She added, "This is a phase where it is necessary to keep options open and respond accordingly."
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