Faster Rotation: What Is the Investment Strategy for the 'Samulnori Market'?

[Asia Economy Reporter Ji Yeon-jin] Recently, in the stock market, the term "Samulnori (Sell on all sides, win by playing)" has become popular, reflecting a rapid rotation market trend. Although the KOSPI is hovering around the 3200 level, the fast-paced rotation of stocks continues, with investors buying into rapidly rising sectors or themes only to be held back by market movements. Therefore, experts advise focusing on sectors without peak-out concerns regarding growth.

According to the Korea Exchange on the 9th, the steel sector, which was the only sector with positive returns (1.06%) in the last week of last month, posted a -4.22% return through the 6th of this month. Meanwhile, the healthcare sector surged from -3.41% in the last week of last month to 5.93% this month. Although domestic companies recorded record-breaking earnings in the first half of this year, concerns about peak-out (reaching a high point) have spread, limiting upward movement in the index and creating a rapid rotation market trend.

Experts recommend building portfolios with sectors that have no peak-out concerns regarding growth, cyclical stocks where suppliers have pricing power, eco-friendly themes, and "reopen" beneficiaries preparing for economic normalization next year to avoid falling into the "Samulnori trap." Shin Seung-jin, a researcher at Samsung Securities, explained, "U.S. President Joe Biden announced a plan to make half of all new cars sold in the U.S. eco-friendly by 2030. Considering that the penetration rate of pure electric vehicles in the new car market is currently around 2-3%, this is a very aggressive target," adding, "This is why long-term investment in domestic companies with strengths in electric vehicle platforms, batteries, and materials is necessary." He maintains a mobility-centered portfolio including Samsung SDI, Kia, LG Electronics, EcoPro BM, SKC, and Soulbrain, while newly recommending LS Electric, which is expected to benefit from infrastructure investment and expanded eco-friendly policies.

Lee Kyung-min, a researcher at Daishin Securities, proposed a strategy to increase the proportion of structural growth stocks (internet, secondary batteries, renewable energy) and export stocks (semiconductors, automobiles, transportation). He emphasized, "The Bank of Korea’s revised outlook and the Korea-U.S. summit reaffirmed the market leadership of structural growth and export stocks," adding, "The short-term fluctuations present an opportunity for further weight increases." He also forecasted that the semiconductor and automobile sectors could regain market leadership.