In September, Value Up Again... Focus on Automobile, Banking, and Insurance Sectors

Expected KOSPI Band, 2540~2780

In the upcoming September, advice has been given to pay attention to value-up beneficiary stocks in the automobile, banking, insurance, and related sectors. Value-up is considered a good investment alternative during times of high uncertainty, such as the US presidential election, and increased concerns about corporate earnings. Additionally, despite easing concerns about a US economic recession and expectations of interest rate cuts, the rise in domestic stock indices is expected to be limited due to worries about the performance of Korean companies.

Famous NH Investment & Securities researcher Yoo released a report containing these insights on the 28th. Yoo stated, "Value-up is a good investment alternative during times of high uncertainty, such as the US presidential election, and increased concerns about corporate earnings (the September value-up index is scheduled to be announced)," adding, "The trend of falling interest rates and the slowdown in index growth create a favorable environment for value-up sectors with high dividend yields."

Accordingly, the sectors to focus on in September, classified as value-up beneficiaries, include △automobile, banking, insurance △shipbuilding △defense △healthcare △internet and gaming.

Yoo further explained, "Historically, high-dividend stocks have performed most positively in September and October," and "Considering cash flow and return on equity (ROE) levels within value-up related sectors, automobile, banking, and insurance are advantageous choices."

Despite easing concerns about a US economic recession and expectations of interest rate cuts, the rise in indices is expected to be limited due to concerns about the earnings of domestic companies. He said, "The currently expected profit levels are also excessive," adding, "In the first half, semiconductor earnings revisions improved overall earnings momentum, but in the second half, the impact of underperforming sectors is likely to increase."

September is a period with little change in earnings consensus, and it is seen as a time when macro variables have a greater influence than corporate earnings. He suggested, "The KOSPI band is expected to move within a box range of 2540 to 2780 (with confirmed PBRs of 0.91x and 1.00x respectively)," and "This is a phase where sector and stock selection are more important than the index."

He also predicted that volatility may continue for some time depending on macroeconomic data releases such as the US employment report in September, the US presidential candidates' TV debates, the Federal Open Market Committee (FOMC) meetings, and changes in support rates among presidential candidates.