2026 South Korea Mid-Year Outlook: Mettle to Sail Rough Seas

Research evidence excerpt

2026 South Korea Mid-Year Outlook: Mettle to Sail Rough Seas

Asia Pacific Insight

May 12, 2026 10:00 PM GMT

Morgan Stanley & Co. International plc, Seoul Branch+M2026 South Korea Mid-Year Outlook Joon Seok

Equity Analyst

Mettle to Sail Rough Seas Joon.Seok@morganstanley.comMorgan Stanley Asia Limited+ +82 2 399-4934

Kathleen Oh

We see further upside for the KOSPI thanks to structural stories ChiefKathleen.Oh@morganstanley.comKorea/Taiwan Economist +852 2848-7340

including reform. However, we expect 2H26 to be a bit choppy. Gek Teng Khoo

Hence, we set our three- to six-month range at 6,500~9,500. Strategist

Gek.Teng.Khoo@morganstanley.com +852 3963-0303

Positioning is more important – we stick to the winners. Morgan Stanley & Co. International plc, Seoul Branch+

Heewon Choi

Key Takeaways Equity Analyst

Heewon.Choi@morganstanley.com +82 2 399-4836

Our KOSPI target for 1H27 is 8,500. We believe structural growth stories and Minseo Kang

reform continue – lean more to our bull case (10,000). Our bear case is 6,000. Research Associate

Minseo.Kang@morganstanley.com +82 2 399-4816

We still expect rough seas for the next 6~12 months in view of external

uncertainties, but the KOSPI should be resilient, Exhibit 1 : Sector Allocation

We Current Ranking Prior Ranking reiterate that 2H26 should be weaker vs. 1H26.

9 9 10 10 11 11 12 12

Stick to IT, Industrials, Autos, Healthcare, and Financials. We add SK Square and 5 4 3 5 5 6 7 7 8 8

1 1 2 2 3

NC Corp to our Focus List and take out Kakao. Small/mid caps more in play.

Banks Svc. Cons Materials Energy Utilities Health Comm. Financials StaplesCons Disc Industrials IT Components& Care

Middle East situation a risk, but growth should be resilient: External uncertainties Auto Non-bank