Goldman Sachs Equity Strategist: South Korean Stocks to Rebound After “Scary” Correction

According to Odaily Planet Daily, Timothy Moe, Chief Asia Pacific Equity Strategist at Goldman Sachs, stated that after a market decline that triggered a circuit breaker, South Korean stocks are expected to rebound. In the long run, this will prove to be a technical correction, although a scary one within a prolonged bull market. The fundamentals remain very strong.

The Korea Composite Stock Price Index once plunged 8.8% on Monday, leading the decline among Asian tech stocks. The fall occurred after a strong rally fueled by AI optimism, during which many investors used leverage to chase gains in a handful of semiconductor and tech stock sectors.

Timothy Moe said, "There are clear signs of increased speculative activity, especially among South Korean retail investors, who are particularly keen on buying certain leveraged ETFs. What we are currently seeing is that these accumulated positions are being forcibly sold off, and the leverage effect has further exacerbated the decline." Last week, Goldman Sachs raised its forecasts for the South Korean and Taiwanese stock markets, citing anticipated profit growth driven by the AI boom in these tech-heavy markets. Moe stated on Monday that the valuation of South Korean stocks is very reasonable and expects that underlying profits will continue to drive growth. (Jinshi Data)