Franklin Templeton sees Seoul’s Kospi at 3,000

SEOUL • North Korea’s renewed missile threat won’t stop Seoul’s benchmark stock index from rising more than 25% in the next two to three years, provided that there’s peace, Franklin Templeton Investments said.

The company predicts the Kospi will reach 3,000 as technology companies including Samsung Electronics Co continue to lead the gauge higher, according to JJ Kang, head of equities at Franklin Templeton Investment Trust Management in Seoul. North Korea fired an intercontinental ballistic missile (ICBM) on Tuesday, spurring the Kospi’s steepest drop in three weeks. The index gained 0.3% to close at 2,388.35 yesterday.

“Unless there is a war, there won’t be any major change in markets,” Kang said in an interview on Tuesday, after North Korea announced the missile was an ICBM. “Political and economic issues should be dealt with separately.”

Franklin Templeton remains bullish even as foreign investors were net sellers of South Korean stocks on Tuesday and dumped 2.7 trillion won (RM10.31 billion) worth of the nation’s debt on a settlement basis on July 3, the biggest single-day outflow since at least 2011.

“The Kospi is still about 20% cheaper than other emerging markets,” Kang said. “If earnings continue to meet expectations and sentiment on Korea markets is improved, under the current pace, it’s not a burden for the index to reach 3,000 points within two or three years. For this year? It would not be a problem to reach about 2,520.” — Bloomberg