Korea Equity Strategy: Non-discretionary flows a headwind, but fundamental upside and boost to national wealth still in play

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Korea Equity Strategy: Non-discretionary flows a headwind, but fundamental upside and boost to national wealth still in play

J P M O R G A N Global Markets Strategy

25 June 2026

Korea Equity Strategy

Non-discretionary flows a headwind, but fundamental

upside and boost to national wealth still in play

We remain directionally bullish on Korea equities despite ongoing forced foreign Equity Macro Research

ACselling and elevated volatility (both of which are likely to persist). This is driven Mixo Das

by a combination of our constructive view on AI and resultant hardware earnings (852) 2800-0511

(punctuated at times by narrative vulnerabilities - see below), added earnings mixo.das@jpmorgan.com

tailwinds from growth in a variety of (AI-adjacent and other) Industrials, J.P.MorganMorganBrokingSecurities(Hong (AsiaKong)Pacific)LimitedLimited/ J.P.

potential wealth-effect and NIM boost to Financials, and ongoing (if

Stanley Yang

incremental) valuation tailwinds from the governance reforms (which will (82-2) 758-5712

likely come back to prominence later this year). In addition, it is noteworthy that stanley.yang@jpmorgan.com

the earnings of the Tech names participating in the AI datacenter buildout are J.P. Morgan Securities (Far East) Limited, Seoul

Branch

now large enough to be meaningful at a macro level (Figure 28) - creating a

wealth boost not just for corporates and households, but even for the government Rajiv Batra

(65) 6882-8151

- enabling long-term measures and planning. As such, we continue to recommend rajiv.j.batra@jpmorgan.com

adding on any dips and staying with maximum exposure in Korea. Korea remains J.P. Morgan Securities Singapore Private Limited

our most preferred market in the region and we raise our 12m-out base/bull/ Joy Wang