Franklin Templeton Targets Defense, Shipbuilding, Nuclear Beyond Semiconductors as Korean Stocks Trade Below Book Value

According to Franklin Templeton's statement released on July 6, strategist Christie Tan argued that South Korea's stock market is no longer driven by broad strength but by semiconductor giants, and approximately two-thirds of listed companies remain undervalued. Tan characterized the market as "peacock and tiger coexist"—peacocks are large semiconductor stocks benefiting from AI memory supercycles, while tigers are overlooked quality companies trading below their asset values.

Franklin Templeton recommended investors shift from index-tracking strategies to active stock picking, with particular focus on defense, shipbuilding, nuclear power, robotics, and power equipment sectors, expected to benefit from U.S. reindustrialization and global supply chain restructuring. The firm also flagged rising leverage ETF and derivatives trading among retail investors as a structural risk amplifying market volatility, advising diversified positioning and hedging strategies.