Overshadowed by KOSPI rally, bank stocks pin hopes on rate hikes

Banking stocks have largely remained on the sidelines despite the KOSPI’s record-setting rally this year, according to Korea Exchange (KRX) data Monday. Analysts said investor attention and liquidity have flowed heavily into brokerage firms and other market beneficiaries, leaving bank shares, often regarded as defensive investments, struggling to keep pace with the broader market. Still, they believe the banking sector may be poised for a rebound, supported by expectations of interest rate hikes in the second half, more proactive shareholder return programs and relatively low valuations despite solid earnings power. According to KRX industry indices, as of Friday, the banking index gained only 14.46 percent this year, lagging far behind the KOSPI’s 101.13 percent rally over the same period. The semiconductor index surged 163.34 percent and construction stocks advanced 96.22 percent, while other financial sectors such as brokerages and insurers posted solid gains of 67.9 percent and 44.56 percent, respectively. Reflecting the sector’s weak share performance, the combined market capit

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