KOSPI 5,000: Whether Momentum Persists Is Key...Beware of Inflation in the Second Half | Lee Kyung-min, Manager, Daishin Securities FICC Research Department

Summary

Lee Kyung-min of Daishin Securities argues that the KOSPI uptrend remains intact as long as 12-month forward EPS keeps rising, with semiconductors as the main leadership group. He sees short-term overheating and tariff/rate risks as consolidation factors rather than a trend reversal, and expects bond yields to stay below 4.5-4.6%. He favors KOSDAQ seasonality, lagging domestic-demand and growth sectors such as internet and pharma/biotech, and China-exposed consumer names, while warning against chasing autos.

• KOSPI uptrend is earnings-driven, with 12-month forward EPS and KOSPI showing a 0.93 correlation.
• Semiconductors remain the top market leadership group; if not owned, the speaker says to buy them.
• Short-term volatility and bond-yield rebounds are seen as consolidation risks, not a trend reversal.
• KOSDAQ is expected to relatively outperform in January-February and possibly Q1 on seasonality and a record budget.
• Internet and pharma/biotech are favored as cheap rate-sensitive growth sectors if bond yields stabilize.
• Domestic-demand and growth laggards, especially China-exposed consumer/export names, are preferred over already-rallied retailers.
• Autos have rallied and should be accumulated slowly rather than chased.
• Trump tariff and Supreme Court IEEPA risks are monitored but expected not to escalate sharply before the midterms.