South Korea’s stock market could reach a high of 2,200 in 2012 amid better than expected market conditions in the United States and eased economic policies in China, a report said Thursday.
Deutsche Bank said in its latest report that challenges confronting the global economy will affect the Korea Composite Stock Price Index (KOSPI) this year, although it should be able to grow.
The bank lowered its peak estimate for the KOSPI from the previous 2,250 to reflect persistent uncertainties.
“The markets in 2012 should continue to be dominated by Europe’s ongoing sovereign crisis, fears of a slowdown in China’s economy, policy uncertainty, elections and ongoing tension in the Middle East,” said Francis Yim, a research analyst at Deustche Bank.
“Nevertheless, we believe the U.S. economy should improve and the European debt crisis should ease in the second half of 2012. There should be no hard landing.”
The bank, accordingly, expected the South Korean bourse to be more volatile and uncertain in the first half of the year before improving in the second half.
It recommended that investors should hold shares in South Korea’s automobile, insurance and shipbuilding sectors.