You Must Fully Trust Vaccines... KOSPI Upper 3300 "Focus on Clothing, Duty-Free Shops, Casinos"

[Asia Economy Reporter Lee Seon-ae] NH Investment & Securities forecasted the KOSPI expected band for this week (14th-18th) to be between 3180 and 3300. Factors driving the rise are expected to include accelerated vaccine rollout and easing valuation pressure on the KOSPI. On the downside, increased volatility in meme stocks and caution surrounding the U.S. Federal Reserve's Federal Open Market Committee (FOMC) were cited.

According to NH Investment & Securities on the 13th, South Korea's COVID-19 vaccination rate has currently reached 19%. The volume of vaccine supplies is also rapidly increasing. The government plans to receive 19.4 million doses by the end of June and 100 million doses by the third quarter.

Accordingly, expectations for the normalization of economic activities are growing. Earlier on the 8th, Prime Minister Kim Boo-kyum stated, "After consultations with countries where quarantine situations are stable, group travel will be allowed as early as July for those who have completed vaccination."

As a result, reopening-related stocks are being influenced in the market. Since major advanced countries have high vaccination rates, expectations for the normalization of overseas consumption and the resumption of travel are increasing. In particular, attention is needed on the normalization of domestic demand in Korea, given the rapid progress in vaccination rates and vaccine supply.

Researcher Kim Young-hwan of NH Investment & Securities said, "There are factors that may temporarily slow the rotation within cyclical stocks from materials and industrials to IT and automobiles, such as semiconductor production disruptions due to the COVID-19 outbreak in Taiwan and concerns over continued yuan strength amid soaring Chinese prices." He added, "However, as the period of rapid price increases due to base effects is ending and global vaccine supply is becoming smoother, an increase centered on IT and automobiles is expected to continue until the third quarter." He recommended a short-term trading approach focusing on reopening-related stocks driven by expanded vaccination. The sectors of interest include automobiles, apparel, duty-free shops, and casinos.