Business · Markets · 4 hrs ago
Korean economist warns of further stock-market declines
Economist Kim Young-ik warns that South Korean stocks may fall further after the KOSPI dropped from an intraday high of 9,380 in June to around 5,400.
He says South Korea’s leading economic indicator peaked in July and has since turned down, a sign that the market could remain under pressure.
Kim expects the KOSPI to trade between 5,000 and 6,500 through December, with a greater chance of reaching the lower end.
He also says US stocks are more overvalued than during the 2000 technology bubble, citing high share prices compared with company earnings, dividends and economic output.
Kim argues that high US interest rates could weigh on share prices and eventually reduce consumer spending and investment in artificial intelligence.
He advises investors to cut stock holdings and increase cash-like assets, such as short-term bonds, while the economic downturn continues.
He says a cheaper buying opportunity could arrive within a year, possibly after a sharp US market decline.
Economist Kim Young-ik warned that South Korea’s stock market could fall further, with the KOSPI potentially nearing 5,000 by December.
He said the market remained overvalued against nominal GDP and that leading indicators had turned down after peaking in July.
Kim also said US stocks were more overvalued than during the 2000 information technology bubble.
He advised investors to reduce stock holdings and increase cash-like assets such as short-term bonds.
He said a cheaper buying opportunity could emerge within a year.
- Who
- Kim Young-ik, an adjunct professor at Hanyang University’s Institute for Future Talent Education.
- What
- He warned of further declines in South Korean and US stock markets and advised reducing stock exposure.
- When
- Kim made the comments on October 20; the article was published on October 23, 2026.
- Where
- South Korea, with comments also addressing the US stock market.
- Why
- He said leading indicators had weakened and stocks, particularly in the US, were overvalued.
This story does not have two clearly opposing sides.
The KOSPI rose to about 9,380 intraday, according to Kim.
South Korea’s leading indicator reached a peak and began to decline.
US margin debt began to fall after reaching a reported high in June.
Kim assessed the domestic stock market and warned of further declines.
- KOSPI level in June
- About 9,380 intraday
- Recent KOSPI level
- About 5,400
- KOSPI forecast through December
- 5,000 to 6,500, with a likely test near 5,000
- US CAPE ratio
- 41 times
- S&P 500 dividend yield
- 1.1%, compared with a 4.4% long-term average
- US margin debt peak
- $1.5 trillion in June
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What people are saying
I do not think the KOSPI has reached its bottom yet.
The US stock market is more overvalued now than it was during the 2000 information technology bubble.
Increase cash-like assets such as short-term bonds.
I think an opportunity will come within a year.