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Foreigners, net purchase of 7 trillion won or more on the KOSPI market
“Increased corporate earnings will lead to an upward trend in the KOSPI”
Possibility of weakening net foreign purchases due to the burden of overvaluation
“Prefer the transport of semiconductor chemicals, which is expected to benefit from the economic recovery”
Photo = Yonhap News
The KOSPI index continues to recover after the reproliferation of a new coronavirus infection (Corona 19). Foreigners are advised to respond as beneficiaries of the economic recovery rather than aiming for a further increase in the index, as there is a possibility that the external market will weaken.
According to the Korean Stock Exchange on the 29th, last week (23-27), the KOSPI index closed at 2,633.45, an increase of 79.95 points (3.13%) compared to the previous week. During the same period, the KOSDAQ index rose 1.76%.
There have been concerns that the third epidemic has started in earnest, as the number of confirmed corona19 patients has continued to hit 500 for three days in a row, but Kospi is breaking the highest level every day. This is because foreigners kept buying more than 7 trillion won. Foreigners maintain a net buying trend in 16 business days except for a single day from 5 to 25.
In the US, the confirmed cumulative crown19 exceeded 13 million, but the stock market continues to rise. On the New York Stock Exchange (NYSE), the Standard & Poor’s (S&P) 500 and Nasdaq indices reached record levels. The NASDAQ Index rose 2.9% from the prior week to 12,205.85, and the S&P 500 Index also closed at 3,638.35, up 2.2%. The Dow Jones 30 industrial average also registered 29,910.37, 2.2% more than the previous week.
Expectations for the year-end shopping season starting on Thanksgiving and Black Friday are expected to support the stock market. Adobe Analytics analyzed that US retailers’ online sales were around $ 5.1 billion during Thanksgiving. This is a 22% increase over the same period last year, the largest in history. Sales over the Internet are expected to increase significantly due to Corona 19.
The domestic stock market environment is also positive. As the corporate earnings outlook continues to be strong, the KOSPI spike is expected to lead to a trend.
Park Seok-Hyun KTB Investments and Securities(3,160 -1.56%) The researcher said: “In 2017, KOSPI’s operating profit growth was too concentrated in the IT industry (85.7%), but the contribution to this year’s operating profit growth will be evenly distributed at 32.1%. % in IT and 24.3% in semiconductors “. “It supports the high stability of Kyungshin.”
Possibility of weakening net foreign purchases due to KOSPI’s ‘high evaluation’ … “Semiconductor · chemical · transport preference”
However, there are also observations that the KOSPI will show impressive. This is because the gap between economic fundamentals (basic physical strength) and stock prices is growing in Corona 19’s reproliferation phase.
Ahn So-eun, Researcher at IBK Investment & Securities, noted: “Looking at the long-term trend of KOSPI’s market capitalization / Gross domestic product (GDP), the ratio of KOSPI’s market capitalization, which has reached a new record compared to the sum of nominal GDP in the last four quarters, exceeds 0.9 times.
“The period in which the past KOSPI exceeded this range was on the brink of the IT bubble of 2000 and the global financial crisis of 2008. If all the expected factors, such as the Corona 19 vaccine and economic recovery, are not met, it is difficult to reasonably accept the price level of the shares. I can, “he added.
There is a possibility that the net purchase of foreigners will weaken due to the burden of a high valuation on the KOSPI. In the past, supply and demand from foreigners showed a change of direction when the ‘market capitalization / GDP’ ratio soared.
Researcher Soeun Ahn said: “Every time the market capitalization / GDP ratio exceeded the +1 standard deviation of the long-term trend, the supply and demand of foreigners turned negative.” The size of the sale was considerable, ”he said.
Also, as the end of the year approaches, uncertainties may increase. If the agreement on additional stimulus measures is delayed until the inauguration of the new US government, it is estimated that concerns about the impact of the end of December of the Corona 19 stimulus measures, which had been working.
It is advice to respond to this as a beneficiary of the economic recovery, which has risen relatively less.
NH investments and securities(11,200 -1.32%) The researcher said: “Instead of predicting and responding to the direction of the stock index, it is desirable to have a strategy that contains the beneficiaries of the economic recovery, who have risen relatively less from a stock point of view.” “We maintain our preference for the chemical and transportation industries.”
Eunbit Go, Reporter Hankyung.com [email protected]
