Morgan Stanley: There's still 36% room to go up after Han's leverage

On 3 August, Morgan Stanley moved the Korean stock rating from flat to high, calling the recent “leverage clean-up”, providing investors with better access to the theme of artificial intelligence trading and industrial supercycles. Some strategists, such as Daniel K Blake, wrote in their report that the Kospi index still had 36 per cent more room than its target of 9,000 points as a result of crowded trade and a significant levelling of leverage positions. On Monday, the index fell by 5.5 per cent, a record 18 per cent increase last Friday. The analyst stated that the recent sales were “mainly due to technical factors” and stated that “the deleveraging process of leverage ETF, hedge fund leverage and bulk bond transactions is halfway through”. The Kospi index has accumulated a decline of over 30 per cent since its height in June. The fall was further exacerbated by the rapid sale of South Korean stock markets by investors as an Asian artificially intelligent demand target, and the surge in a leveraged ETF and excessive concentration of index weights. Morgan Stanley predicts that the Kospi index will fluctuate between 5500 and 10,500 points in the short term, and believes that Samsung electrons and SK Hercules will provide valuation support to the market; and that stock materials in industries such as industry, defence and finance will benefit from the good。