KOSPI to bottom out at 1,880 level: Hyundai Securities

[THE INVESTOR] South Korean brokerages are busy issuing forecasts on the local stock markets. Among them, Hyundai Securities says the benchmark KOSPI would bottom out at the 1,880 level following Britain’s latest decision to leave the European Union.

Considering that some of the responses we are seeing may be excessive, and intertwined with political uncertainties, it would be reasonable to see the bottom at 1,880 points, which is about 0.98 times KOSPI’s PBR, according to a report compiled by Kwak Byung-yeol, an analyst with the brokerage.

He added that KOSPI’s average PBR around the time of the 2008 Lehman Brothers crisis stood at around 0.96 times.

The report stressed, however, that the index would soon see a rebound.

“Most of the uncertainties surrounding Brexit are likely to be dissolved this week after related countries in Europe iron out the countermeasures,” Kwak said. “South Korea is also seen to be proactively dealing with the issue.”

Hyundai Securities said the latest decline in the South Korea won is expected to be a boon for auto and other export-oriented shares on KOSPI.

By Kim Ji-hyun (jemmie@heraldcorp.com)