Extreme KOSPI swings after U.S. and Israeli airstrikes on Iran are worsening the 'Korea discount', says Peter S. Kim of KB Financial Group. The index plunged 7.24% on March 3 and surged a record 9.63% on March 5. Kim blames retail investors' short-term, high-risk trading.
At the Jefferies Asia Forum in Hong Kong, Peter S. Kim, global investment strategist at KB Financial Group, linked recent KOSPI volatility to the ongoing 'Korea discount'—the chronic undervaluation of Korean-listed companies. With over 30 years in finance, including roles at HSBC Securities Korea and founding a Hong Kong hedge fund, Kim heads KB Securities' global business division. After U.S. and Israeli airstrikes on Iran, the KOSPI dropped 7.24% on March 3, triggering a sell-side circuit breaker; losses hit 12% the next day, exceeding post-9/11 declines. It then jumped 9.63% on March 5—its biggest daily gain ever—activating a buy-side breaker. Kim highlighted retail investors' leveraged, short-term trading, with sidecars triggered nine times this year, complicating institutional hedging. 'Foreign investors find this baffling. How can an index in a market that isn’t even small swing 5 percent to 6 percent so casually?' he said, calling volatility an underappreciated factor alongside governance. Despite 2025's 75.89% rise and 33.7% gains in 2026 through Thursday, KB Securities forecasts 7,500 points in two years. Kim urged 'sticky money'—long-term capital—warning hot money has surged since last August's semiconductor pivot. He questioned government efforts like leveraged ETFs and Kosdaq 3,000 targets as encouraging speculation.
