Goldman Sachs Equity Strategist: South Korean Stocks Set to Rebound After "Terrible" Correction

Odaily Planet Daily News: Goldman Sachs Asia Pacific Chief Equity Strategist Timothy Moe stated that following a circuit breaker-triggering decline, South Korean stocks are expected to rebound. In the long term, this will prove to be a technical correction, albeit a terrible one within a prolonged bull market. The fundamentals remain very strong.

South Korea's KOSPI index plunged as much as 8.8% on Monday, leading losses among Asian tech stocks. This decline occurred after a strong rally fueled by AI optimism, where many investors used leverage to chase gains in a few semiconductor and tech stock sectors.

Timothy Moe noted: "There were clear signs of increasing speculative activity, particularly among South Korean retail investors, who were especially keen on buying some leveraged ETFs. What we are currently seeing is these accumulated positions being forced to sell, with the leverage effect further exacerbating the decline." Goldman Sachs raised its forecasts for the South Korean and Taiwanese stock markets last week, citing expected profit growth in these tech-heavy markets driven by the AI boom. Moe stated on Monday that the valuation of South Korean stocks is very reasonable and anticipates that potential profits will continue to drive growth. (Jin Shi)