Nomura Securities: "Semiconductor Supercycle... KOSPI Expected to Reach 5,000 Next Year"

Nomura Securities has set its KOSPI forecast for next year at around 5,000. The firm analyzed that expanded investments in artificial intelligence (AI) infrastructure, a supercycle in memory semiconductors, and corporate governance reforms will bolster the stock market.

At a media briefing held on December 16 at the Finance Center in Jung-gu, Seoul, Nomura Securities predicted that from 2026 to 2027, concentrated investments by global big tech companies will lead to the establishment of numerous AI data centers worldwide.

Park Seyoung, Executive Director at Nomura Securities, stated, "Not only high-bandwidth memory (HBM), but also energy storage system (ESS) batteries, transformers, electric power equipment, and cooling systems are all seeing their supply chains boosted across the board, which will be positive for the stock market."

By sector, the company expects semiconductors, defense, healthcare, electric power equipment, and nuclear power to be promising. Executive Director Jeon Changwon analyzed, "For the next two years, memory demand will be strong and prices will be high, so the profitability of memory semiconductors is likely to exceed even the supercycle of 2017-2018."

Nomura Securities also forecast that as the won-dollar exchange rate stabilizes, it will fall to as low as 1,380 won by the end of next year.

Economist Park Jungwoo commented, "The government is currently making various policy efforts targeting exporters, the National Pension Service, and households, and since the United States is also expected to cut rates about two more times next year, the dollar is likely to remain weak throughout the year."

He added, "With the inclusion of Korea in the World Government Bond Index (WGBI) beginning next year, the government pushing for inclusion in the Morgan Stanley Capital International (MSCI) index, improvements in domestic corporate governance, a solid profit structure for semiconductors, and increased trust in the domestic market among individuals, the exchange rate should stabilize."

Regarding interest rates, Nomura Securities projected a stance of holding rates steady. However, it analyzed that "if the Bank of Korea feels pressure to raise rates, it would be due to inflation."

He went on to say, "Otherwise, the policy of holding rates steady is likely to continue next year, and only after economic growth is firmly established-perhaps after 2027-will the rate hike cycle be considered."