UBS lowers 12-month target for South Korea's KOSPI index to 8,000 points

UBS has lowered its 12-month target for the South Korean KOSPI Index by 9%, citing rising interest rates, higher oil prices, and a strengthening local currency as factors that will affect corporate earnings. The forecast was cut from 8,800 points to 8,000 points; the upside/downside targets for the KOSPI Index are 9,200 and 5,100, respectively. In a report released on Friday, analysts including Yong-Suk Son wrote: "Although there is still considerable upside potential for the KOSPI, we believe the index may continue to fluctuate within a range until the upcoming third and fourth quarter earnings seasons can more clearly demonstrate earnings sustainability and shareholder return plans." Given the subdued activity from foreign and retail investors, market liquidity has eased, and with the Korean won's substantial appreciation, negative factors from the foreign exchange market have not yet been fully reflected in the market.