KOSPI breached the 7,000 level on the 13th, falling to 6,903.32 as of 2:20 PM, down 7.66% from the previous session. Lee Jin-woo, Research Center Director at Meritz Securities, attributed the decline to a supply-demand collapse during an adjustment phase, stating in a phone interview with Yonhap Infomax that 'there are no factors that can explain the magnitude of the decline.' The drop followed sequential events that undermined market expectations starting with Meta, as the market has yet to identify catalysts strong enough to reverse the correction.
Lee Jin-woo Attributes Decline to Sequential Negative Events Starting with Meta
Lee stated that 'the market can be interpreted as not yet finding materials that can significantly reverse the adjustment phase,' explaining that 'events that damage market expectations have appeared in succession starting with Meta.' He added that while Samsung Electronics delivered solid results, it 'did not surprise the market,' and that the SK Hynix American Depositary Receipt (ADR) listing 'requires time to judge whether it is a performance that will surprise the market.' Lee further noted that the correction continued 'as the possibility that SK Hynix consensus might be wrong was raised' on the 13th.
Meritz Securities Views Correction as Supply Vacuum Ahead of Late-Month Earnings
Lee emphasized that corporate fundamentals remain unchanged, characterizing the current adjustment as a 'supply vacuum' appearing ahead of US Big Tech and domestic major company earnings releases scheduled for late this month. He stated that 'if structural growth confidence is confirmed in Big Tech guidance, the market will see the correction as excessive and recover quickly.' Lee noted that future stock price direction depends on whether the semiconductor industry cycle is viewed as cyclical or as having entered a structural growth phase.
Lee Jin-woo Maintains Year-End KOSPI 10,000+ Forecast Despite Current Decline
Lee maintained Meritz Securities' existing forecast that KOSPI will exceed 10,000 within the year. The firm raised its year-end KOSPI target to 11,500 in late May. Lee stated that 'currently there is only a problem with multiples, and the earnings direction remains valid, so we see KOSPI reaching 10,000 within the year.' He added that 'it is difficult to say whether the adjustment magnitude is appropriate using valuation' given that 'supply-demand is amplifying the decline,' noting that 'stock prices are oversold relative to earnings levels, and if those earnings are denied, the correction is justified.' Lee characterized this as a situation where 'one of the two forecasts is wrong, and the starting point to judge this is late this month.'
![Lee Jin-woo, Meritz Securities Research Center Director]()
FAQ
What caused KOSPI to breach 7,000 on the 13th?
Lee Jin-woo of Meritz Securities attributed the breach to a supply-demand collapse during an adjustment phase, stating there are no fundamental factors explaining the magnitude of the 7.66% decline to 6,903.32. He cited sequential negative events starting with Meta that undermined market expectations.
Why does Meritz Securities maintain a year-end KOSPI 10,000+ forecast?
Lee stated that the current issue is multiple contraction, not earnings direction, which remains valid. Meritz Securities raised its year-end KOSPI target to 11,500 in late May and views the correction as a supply vacuum ahead of late-month US Big Tech and domestic earnings releases that could confirm structural growth.
