Morgan Stanley Sees 36% Upside to Korean Stocks After ‘Washout’

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessMorgan Stanley Sees 36% Upside to Korean Stocks After 'Washout'Morgan Stanley upgraded South Korean stocks to overweight, saying the recent “leverage washout” offers investors a better entry point into the artificial intelligence trade and industrial super-cycle theme.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Morgan Stanley upgraded South Korean stocks to overweight, saying the recent “leverage washout” offers investors a better entry point into the artificial intelligence trade and industrial super-cycle theme.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAfter the sharp unwinding of crowding and leverage, Kospi offers 36% upside to Morgan Stanley’s target of 9,000, strategists led by Daniel K Blake said in a note. The country was previously rated equalweight by the broker.The recent selloff was “mainly technical” and “we are past the midpoint of unwinding leveraged ETFs, hedge fund leverage, and retail margin,” the analysts said.The Kospi index has tumbled about 30% from a peak in June, as traders rapidly sold out of the market that has become Asia’s bellwether for artificial intelligence demand. Exacerbating the rout was the nation’s surge in single-stock leveraged exchange-traded funds and concentrated index weightings.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againSouth Korean Regulators have since stepped in to curb the use of such instruments, with the government planning to limit retail involvement in leveraged products, including by capping exposure at a set portion of investors’ total portfolios.Morgan Stanley, which sees Kospi in a near-term range of 5,500-10,500, sees the Samsung Electronics Co. and SK Hynix Inc. providing valuation support. It also predicted tailwinds for stocks in sectors including industrials, defence, and financials. Morgan Stanley also upgraded Thai equities to overweight from equalweight as its analysts see more opportunities in the Southeast Asian nation as it lifts foreign direct investment and competitiveness. Earnings are inflecting and valuations are cheap, while key stocks are set to benefit from the AI capex and energy security themes, they added.Meantime, the bank cut its recommendation on Australia to underweight from equalweight, saying the market offered limited upside after several interest rate hikes and tax reforms that slashed incentives for property investment. It previously saw upside in Australia due to its energy exposure amid the Iran war.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.