Which Industries Are Promising Based on the "Tapering Learning Effect"?

[Asia Economy Reporter Ji Yeon-jin] Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), recently mentioned 'quantitative easing tapering,' drawing attention to investment strategies during past tapering periods.

According to the financial investment industry on the 21st, then-Fed Chairman Ben Bernanke first mentioned tapering during a congressional testimony in May 2013 and officially announced tapering in December of the same year. The Fed reduced the scale of quantitative easing over 10 months starting January 2014 and raised the benchmark interest rate in December the following year. It is expected that this time as well, tapering will begin this year and interest rates will be raised in 2023.

Analyzing the domestic stock market in the second half of 2013 when Hana Financial Investment prepared for the Fed's tapering, both growth stocks and value stocks showed strong performance at that time. Value stocks then rose significantly in the second half of the year, centered on undervalued value stocks, as oil prices and government bond yields were expected to rise, and sectors such as energy, materials, industrials, and financials had underperformed in the first half of the year.

However, this year, these value stocks have already risen sharply in the first half, driving the KOSPI's increase. Lee Jae-man, a researcher at Hana Financial Investment, explained, "Given the current situation, value stocks with limited price merit and only half of the momentum (decline in U.S. 10-year Treasury yields and rise in international oil prices) are unlikely to be advantageous."

Regarding growth stocks, in the second half of 2013, software and automobile sectors showed strong stock price performance together. As the global economy entered an expansion phase from improvement in 2013, not only structurally growth stocks unaffected by economic cycles but also cyclical growth stocks saw significant price increases. A common point was that the operating profit ratio of these sectors increased in the domestic stock market.

It is analyzed that during this tapering preparation period as well, stock price increases are expected in growth sectors where the operating profit ratio is rising. In particular, the healthcare and gaming sectors are expected to see an increase in operating profit ratio in the second half compared to the first half of this year, and these sectors' market capitalization weights are relatively low compared to their peak levels.