South Korea Multi-Asset: KOSPI at Record-Low Valuation: Peak Headwinds, Powerful Tailwinds Ahead

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South Korea Multi-Asset: KOSPI at Record-Low Valuation: Peak Headwinds, Powerful Tailwinds Ahead

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20 Jul 2026 04:59:46 ET │ 21 pages

South Korea Multi-Asset

KOSPI at Record-Low Valuation: Peak Headwinds, Powerful Tailwinds

Ahead

Economics

CITI'S TAKE

Jin-Wook Kim AC

Citi’s South Korea economist and equity analysts have coordinated to +82-2-2077-4229

assess the potential for a rebound in the Korean equity market. Economics jinwook.kim@citi.comView: We highlight that headwinds from capital flows are likely subsiding,

while tailwinds from Korea's strong economic fundamentals and market- Equity Research

friendly policy mix are gathering force. Equity Research View: We maintain

our KOSPI target of 10,000, supported by strong tailwinds. These include Peter Lee AC

solid memory sector fundamentals and historically attractive valuations. +82-2-3705-0720

peter.sc.lee@citi.com

Economics View: Headwinds from capital flows are subsiding, in our view. The AC Jayden Oh

KOSPI’s correction was mainly led by foreign equity investors’ selloff in terms of

+82-2-3705-0747rebalancing and profit-taking. However, we believe foreign equity investors’ selloff

is moderating amid emerging signs of buy-on-dip capital flow. Fund flow into jayden.oh@citi.com

overseas KOSPI-related passive ETFs has accelerated since July 9th. Tightened

regulations would limit retail investors’ access to single-stock-leveraged ETFs, likely

moderating the volatility of the KOSPI market. We believe the NPS will likely remain

overweight domestic equities for longer, considering potential public backlash to a

sharp rebalancing. Tailwinds from Korea's strong economic fundamentals and

market-friendly policy mix are gathering force. We keep our 2026E and 2027E GDP