NH Investment & Securities, Semiconductor and IT-Centered Internet, Gaming, and Media Lead Continuously This Year
[Asia Economy Reporter Song Hwajeong] As the stock market shock caused by the novel coronavirus infection (Wuhan pneumonia) has somewhat eased, attention is turning to the future leading stocks in the market. Experts predict that IT stocks, including semiconductors, will lead the market trend.
On the 10th, NH Investment & Securities released a report titled 'The way to overcome Corona is to resist the temptation to sell Samsung Electronics,' forecasting that this year, leadership will continue to be centered on IT sectors such as semiconductors, internet & gaming, and media & entertainment.
Kim Byung-yeon, a researcher at NH Investment & Securities, said, "As long as the US-centered economic expansion continues, the leadership of global IT companies will also persist," adding, "Therefore, the leading stocks in the Korean stock market remain tech, media, and telecommunication (T.M.T), and this year is not a year of paradigm shift but a year in which the global T.M.T. paradigm continues."
Researcher Kim stated, "The sector with high earnings visibility in the KOSPI is semiconductors," and noted, "In the first half of the year, resisting the temptation to sell Samsung Electronics is key, and in the second half, the timing of selling Samsung Electronics will be crucial." The year-on-year net profit growth rate of the KOSPI this year is 33%, of which semiconductors, including Samsung Electronics, contributed 15.6 percentage points. This means that semiconductors account for nearly half of the KOSPI's net profit growth rate. Kim explained, "The earnings estimates for semiconductors remain the highest among KOSPI sectors, and recent changes in earnings forecasts explain the possibility of concentration in semiconductors," adding, "A strategy to take advantage of stock price declines in the semiconductor sector due to reasons other than semiconductor price drops will be more effective for annual performance."
Foreign investors, who turned to 'buying' last week after three weeks, also focused on purchasing semiconductors. Foreigners net bought Samsung Electronics by 445.8 billion KRW last week, making it the most purchased stock. They also bought SK Hynix worth 73.1 billion KRW, ranking third in net purchases. Considering that foreigners net bought 819.1 billion KRW in the KOSPI last week, more than 60% of their purchases were in semiconductors.
Kim Yae-eun, a researcher at IBK Investment & Securities, explained, "With the risk surrounding the novel coronavirus somewhat alleviated, market attention is increasingly focused on fundamentals, and existing leading stocks will continue to drive market movements," adding, "Even if short-term profit-taking selling pressure intensifies, abundant liquidity due to accommodative policies by major central banks, signals of economic improvement, and corporate earnings improvements provide solid fundamentals, so now is the time to focus on unchanged leading stocks."
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