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Investing.com--Morgan Stanley has raised its June 2026 target for South Korea’s KOSPI index, citing accelerating capital market reforms and strong institutional investor support.
Analysts raised the target to 3,250 from 2,950 points, highlighting the index’s resilience above the 3,000 level, driven by governance reforms and pension fund inflows, despite global macroeconomic uncertainties.
The KOSPI has surged 40% year-to-date, outperforming regional peers, with financials and holding companies leading gains.
Morgan Stanley (NYSE:MS) noted that reforms, including amendments to the Commercial Code and potential tax changes, are progressing faster than expected.
"The reform twist (is) getting stronger," analysts wrote, adding that foreign and domestic institutional investors have replaced retail traders as the primary market drivers.
However, risks remain, including U.S.-Korea trade tensions and potential sector tariffs. Morgan Stanley set a bull-case target of 3,500 and a bear-case scenario of 2,500, contingent on global macro conditions.
Analysts recommended overweight positions in financials, high-yield stocks, and holding companies, with POSCO (NYSE:PKX) Holdings (KS:005490) added to its focus list due to restructuring potential.
"Value has more to go," analysts added, emphasizing dividend-friendly stocks and M&A targets.