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Foreigners, net purchase of 7 trillion won or more in the KOSPI market
“The increase in corporate profits will lead to an upward trend in KOSPI”
Possibility of weakening net purchases from abroad due to the burden of overvaluation
“Preferring the chemical transport of semiconductors, which should benefit from the economic recovery”
Photos = Yonhap News
The KOSPI index continues to rise in the aftermath of the re-proliferation of a new coronavirus infection (Corona 19). Since there is a possibility that the market share of foreigners may weaken, it is advised to respond as a beneficiary of the economic recovery rather than aiming for a further increase in the index.
According to the Korea Exchange on the 29th, last week (23-27), the KOSPI index closed at 2633.45, up 79.95 points (3.13%) from the previous week. Over the same period, the KOSDAQ index grew by 1.76%.
There have been concerns that the third outbreak has started in earnest as the number of coronally confirmed patients19 continued to reach 500 for three consecutive days, but the KOSPI is surpassing the maximum every day. This is because foreigners have continued to buy more than 7 trillion won. Foreigners maintain a net buying trend in 16 trading days with the exception of a single day from 5th to 25th.
In the United States, the confirmed cumulative krona19 has exceeded 13 million, but the stock market continues to rise. On the New York Stock Exchange (NYSE), the Standard & Poor’s (S&P) 500 index and the NASDAQ index hit record highs. The NASDAQ index was up 2.9% from the previous 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 recorded 29,910.37, up 2.2% from the previous week.
Expectations for the year-end shopping season starting with Thanksgiving and Black Friday should support the stock market. Adobe Analytics analyzed that on Thanksgiving, US retailers generated approximately $ 5.1 billion in online sales. This is a 22% increase over the same period last year, the largest on record. Online sales are expected to increase significantly due to Corona 19.
The domestic equity market environment is also positive. As the outlook for corporate profit continues to be solid, the peak of the KOSPI should 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 excessively concentrated in the IT sector (85.7%), but the contribution to this year’s operating profit growth will be distributed evenly to 32, 1% of IT and 24.3% of semiconductors. “Supports the high stability of Kyungshin.”
Possibility of weakening of net purchases from abroad due to ‘high valuation’ of KOSPI … “Prefer semiconductors, chemicals and transport”
However, there are also observations that the KOSPI will show breathtaking. This is because the gap between economic fundamentals (underlying physical strength) and share prices is growing in the re-proliferation phase of Corona 19.
Ahn So-eun, researcher at IBK Investment & Securities, stressed: “Looking at the long-term trend of KOSPI market capitalization / Gross Domestic Product (GDP), the ratio of KOSPI market capitalization, which has reached a new record point compared to the sum of nominal GDP in the last four quarters, it exceeds 0.9 times “.
“The period in which the past KOSPI passed this range was on the verge 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 realized, the level of the share price will be difficult to accept I can, “he added.
There is a possibility that the net purchase of foreigners will weaken due to the overvaluation burden of KOSPI. In the past, foreign supply and demand have shown a change of direction as the “market capitalization / GDP” ratio has risen.
Researcher Soeun Ahn said: “Whenever the market capitalization / GDP ratio exceeded the +1 standard deviation of the long-term trend, the supply and demand for foreigners became negative.” The size of the sale was considerable, “he stressed.
Furthermore, as the end of the year approaches, uncertainties can increase. If the deal on additional stimulus measures is delayed until the inauguration of the new US government, it is believed that concerns about the late December impact of the Corona 19 stimulus measures, which had been operational, could increase.
This is advice we should respond to as the beneficiaries of the economic recovery which has increased relatively less.
NH Investment & Securities(11,200 -1.32%) The researcher said: “Rather than 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 an equity perspective.” “Semiconductors that can benefit from the economic recovery while the industry valuation has been below the KOSPI for three years.” We maintain our preference for the chemical and transportation industries. ”
Eunbit Go, Hankyung.com reporter [email protected]
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