Odaily Planet Daily reports: Morgan Stanley has upgraded its rating on South Korean equities from equal-weight to overweight, citing recent "leveraged deleveraging" as creating better entry opportunities for investors to participate in artificial intelligence trading and the industrial supercycle theme. Strategists including Daniel K. Blake wrote in their report that, following significant unwinding of crowded trades and leveraged positions, the South Korean KOSPI index still has 36% upside potential from its target of 9,000 points. The index fell as much as 5.5% on Monday, after recording a record 18% gain last Friday.
Analysts stated that the recent sell-off was "primarily driven by technical factors," noting that "the deleveraging process involving leveraged ETFs, hedge fund leverage, and retail margin trading is more than halfway complete." Morgan Stanley expects the KOSPI index to fluctuate between 5,500 and 10,500 in the short term and believes Samsung Electronics and SK Hynix will provide valuation support to the market; stocks in industries such as industrial, defense, and financials are expected to benefit from favorable factors. (Jin10)