[Stock Market Weekly Outlook] The Year Begins with I, B, and M

On the 6th, KOSPI opened at 2,927.50, down 26.47 points (0.90%) from the previous trading day. Dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. On the same day, the won-dollar exchange rate started trading at 1,200.9 won, up 4.0 won from the previous trading day. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Junho Hwang] Samsung Securities analyzed that the domestic stock market experienced significant turbulence this week due to the hawkish December U.S. Federal Open Market Committee (FOMC). They recommended constructing a portfolio strategy focused on IT (I), Bio (B), and Mobility (M) sectors for the upcoming week.

According to Samsung Securities on the 8th, the peak of financial investment selling occurred during this week. Financial investors had continued net purchases of 5.5 trillion KRW throughout December last year but sold off 5.7 trillion KRW from the 29th through the 7th. Additionally, the hawkish FOMC minutes increased volatility in growth stocks.

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Shin Seungjin, a researcher at Samsung Securities, explained, "Rather than distinguishing between growth and value stocks, we recommend a portfolio strategy centered on IT, Bio, and Mobility sectors," adding, "The growth of these sectors is key to expanding the market value and valuation of our market."

First, regarding Samsung Electronics within the IT sector, the company hinted at the possibility of a large-scale M&A at CES 2022. If finalized, it would be the biggest deal in six years since the acquisition of an automotive electronics company in November 2016. Although various companies in automotive semiconductors, electronics, and AI have been mentioned as potential acquisition targets, no significant news had emerged until now. This news of Samsung Electronics reviewing M&A could serve as a positive turning point for the revaluation of Korean IT companies' valuations.

Next week, the major event in the Bio sector, the 'JP Morgan Healthcare Conference,' will be held. Due to COVID-19, it has been switched to a fully online format, but Samsung Biologics is scheduled to present on the main track. Expectations are high for the rapidly growing antibody drug market outlook and related expansion plans.

Hyundai Motor Group emphasized 'Robotics' and 'Meta Mobility' in its keynote speech at CES 2022 last week, which can be seen as investment points.

Researcher Shin noted, "It was notable that the metaverse platform can be accessed through displays embedded in cars without separate machinery," and added, "Attention should be paid to Hyundai AutoEver, the only software company within Hyundai Motor Group."

Samsung Securities also selected Kia, LG Electronics, SK Innovation, Pearl Abyss, LG Innotek, ST Pharm, and Daeduck Electronics as weekly recommended stocks.