Yuanta Securities announced on the 22nd that it is raising its KOSPI outlook band for the fourth quarter from the previous range of 3,100-3,500 to a new range of 3,350-3,750. As alternatives to the top 10 stocks in the domestic stock market, the firm highlighted SK Hynix, Samsung Biologics, Doosan Enerbility, HD Korea Shipbuilding & Offshore Engineering, and APR.
Kim Yonggu, a researcher at Yuanta Securities, stated in the "Fourth Quarter Stock Market Outlook and Strategy" report released that day, "While maintaining a conservative earnings outlook for 2025 KOSPI-projecting net profit of 200 trillion won and operating profit of 270 trillion won-we are raising the target multiple for the upper end of the index from 1.1 times to 1.2 times."
The new fourth-quarter KOSPI outlook band is 250 points higher at both the upper and lower ends. On a monthly basis, the forecast anticipates a stepwise upward trajectory: 3,350-3,650 in October, 3,400-3,700 in November, and 3,450-3,750 in December.
Kim cited several reasons for this upward revision: expectations for a recovery in Korea’s export and earnings momentum due to the global boom in artificial intelligence and technology industries and the full-scale fiscal stimulus in major countries; further strengthening of optimism regarding domestic and international macroeconomics, stock markets, and leading stocks, driven by the start of the U.S. Federal Reserve’s rate cut cycle and the trend of bull steepening in the yield curve; an all-out effort to boost the economy and stock market, including the ultra-innovative AI transformation economy, a second round of consumption coupons, visa-free entry for Chinese tourists, and a relay of stock market structural reforms; and a "protective put" supply environment in the fourth quarter, characterized by foreign investors rolling over KOSPI200 futures, net buying of spot shares by foreigners, and net buying of spot shares by institutions.
On the 19th, the KOSPI index opened at 3461.23, down 0.07 points from the previous trading day, as dealers were working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. On the same day, the KOSDAQ index started trading at 858.08, up 0.97 points from the previous trading day. September 19, 2025 Photo by Kang Jinhyung
Kim also noted, "In the fourth quarter, investors' main focus will be on interpreting the investment strategy implications of the Federal Reserve’s slow easing cycle (gradual rate cuts)." He analyzed that the dot plot released in September was significantly distorted compared to the Summary of Economic Projections (SEP) due to the addition of Steve Miran, a close ally of U.S. President Donald Trump, to the Fed's Board of Governors.
He explained, "The market is currently assuming two rapid rate cuts this year (October and December) and three next year (March, June, and December). However, considering the ongoing no-landing scenario for the real economy and the lingering inflationary effects following tariffs, it is highly likely that the actual number of rate cuts in 2025-2026 will be revised to a total of three (75 basis points)." He emphasized that this rate cut cycle should be viewed as a defensive, sporadic, and data-dependent slow easing cycle.
Kim further assessed that, in line with this, there is a strong possibility that the yield curve will continue to steepen as interest rates fall, indicating a trend of bull steepening. He added that both the long-term optimism for domestic and global markets and the leadership of mid- and large-cap structural growth stocks are likely to be further strengthened.
Accordingly, Kim predicted that in the fourth quarter, especially in October, the two main pillars of portfolio and leading stock strategies will be: a focused response centered on genuine growth stocks with strong earnings and policy momentum, and careful selection of winners in the yield curve bull steepening phase.
As sector alternatives, he suggested semiconductors, IT hardware (electrical and electronics), the heavy industry value chain including shipbuilding, defense, machinery, and E&P, as well as bio and software. As alternatives to the top 10 stocks, he proposed SK Hynix, Samsung Biologics, Doosan Enerbility, HD Korea Shipbuilding & Offshore Engineering, APR, NCSoft, Sanil Electric, JYP Entertainment, Korea Petrochemical Ind., and Wonik QnC.
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