Choi Chang-gyu, head of Mirae Asset Asset Management, forecast that the KOSPI could reach an upper range of 10,000 points in the second half, with support at the 7,500 level recently recorded. The forecast comes as Korean stocks experience roller-coaster volatility marked by sharp daily swings in late June and early July. Choi attributed the heightened volatility to a lack of conviction about additional momentum despite the market being in an earnings-based rally, noting that the index has already climbed significantly. He characterized the second-half trajectory as likely to follow a zigzag pattern rather than a straight-line ascent, influenced by foreign investor flows, exchange rates, and big tech AI capital expenditure issues.
Choi Forecasts KOSPI Range of 7,500 to 10,000 for Second Half
Choi stated that the upper end of 10,000 points remains valid based on corporate earnings and Korea's export trends, representing a valuation level that is sufficiently achievable. He specified that the index is unlikely to reach this level in a straight line, but rather will advance in a zigzag pattern as positive and negative factors intertwine. "The upper end based on earnings is valid up to the 10,000 level, but the index will not reach it in one go. The lower end will likely see the recently recorded 7,500 level act as support. Dynamic volatility will continue as foreign investor supply-demand changes, exchange rates, and big tech AI CAPEX issues work in combination," Choi said.
Regarding concerns about selling pressure from pension funds and foreign investors rebalancing their portfolios, Choi drew a line. He emphasized that such selling is merely asset allocation adjustments due to the surge in Korean stocks, not aggressive selling intended to damage the market. "It is difficult to agree with the logic of selling all Korean stocks due to rebalancing, given that policy-driven value-up momentum and earnings improvement trends remain alive," he stated.
Chinese Semiconductors and Macro Variables Identified as Key Risks
Choi identified the rapid rise of Chinese memory semiconductor and humanoid robot companies as the foremost "gray rhino" risk that could determine the market's direction in the second half. He pointed out that if Chinese companies with large-scale production capabilities increase supply amid the global AI industry leadership competition, NAND and DRAM prices could face direct impact.
As external macro variables, Choi highlighted the direction of interest rate policy under Kevin Warsh, the nominee for next Fed chair under the Trump administration, and the high exchange rate hovering around 1,500 won, which has been burdensome for the domestic market. These were designated as key factors for momentum shifts.
Honam Semiconductor Cluster Benefits Expected Over 2-3 Year Timeline
Regarding the market's lukewarm response to the government's recently announced large-scale semiconductor cluster investment plan centered in the Honam region, Choi cited "pre-reflection" and "time lag" as reasons. He explained that the mega-project announcement has already been substantially reflected in large-cap stock prices. "It takes a minimum of 2-3 years from the initial infrastructure stage of factory construction, design, and cleanroom setup (6-12 months) to the front-end and back-end process stages (12-24 months) when equipment and materials/parts orders become full-scale," Choi noted.
He advised that a strategy of monitoring order announcements from materials, parts, and equipment companies related to power equipment, construction, and cleanrooms in chronological order would be more effective than focusing on large-cap stocks, as these sectors are expected to see immediate benefits.
Market Polarization Requires Samsung and SK Hynix Concentration to Ease
Regarding the polarization phenomenon where funds are concentrated in flagship stocks Samsung Electronics and SK Hynix while other sectors with solid earnings such as KOSDAQ, shipbuilding, defense, and nuclear power are neglected, Choi cited "limited liquidity" as the cause. He stated, "For the market's warmth to spread across the board, paradoxically, the dominance of Samsung Electronics and SK Hynix needs to take a breather."
Choi added that stabilization of interest rates and exchange rates is essential for the revival of the KOSDAQ market, which has a strong venture capital character. He projected that if the government's ongoing policies to restore market confidence, such as the introduction of KOSDAQ segments and the exit of underperforming stocks, take root, a rotation rally in neglected quality sectors would be fully possible.
Investment Strategy Emphasizes Cash Holdings and Avoiding Rally-Chasing
Choi offered practical trading tips for individual investors considering portfolio rebalancing in the second half. Given that volatility has been maximized due to the activation of short-term leveraged products, he recommended refraining from chasing rallies when stock prices rise and instead adopting a strategy of buying at low prices when declines are excessive.
Choi presented three directions for recommended ETF strategies and asset allocation alternatives for the second half:
Core position: Hold AI semiconductor and infrastructure assets proportional to market capitalization weight (conservative investors are recommended to use index products such as KOSPI 200).
Target sectors: Semiconductor materials/parts/equipment preparing for supply expansion (MLCC, substrates, etc.) and products related to dividends, financials, and value-up that will serve defensive roles in portfolios.
Alternative assets: Move away from the first-half strategy of going "all-in" on stocks and secure cash assets (ultra-short-term government bonds and short-term bonds), which are the best weapons for responding to volatility.
The interview was conducted on the "Anyway, Economy" program, which airs live every Friday at 4 PM on iDaily TV and YouTube.
FAQ
What is Choi Chang-gyu's KOSPI forecast for the second half?
Choi Chang-gyu of Mirae Asset Asset Management forecast that the KOSPI could reach an upper range of 10,000 points in the second half based on corporate earnings and export trends, with support at the 7,500 level. He stated the index will likely advance in a zigzag pattern rather than a straight line due to multiple factors including foreign investor flows and exchange rate movements.
What are the main risks Choi identified for Korean stocks in the second half?
Choi identified three main risks: the rapid rise of Chinese memory semiconductor and humanoid robot companies that could impact NAND and DRAM prices through increased supply; the interest rate policy direction under Kevin Warsh as nominee for next Fed chair; and the high exchange rate around 1,500 won that has been burdensome for the domestic market.
