[MarketING] Focus on Samsung Electronics' Earnings... Market Volatility Continues

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This week, the domestic stock market is expected to continue experiencing volatility due to ongoing geopolitical risks originating from the Middle East. On the domestic front, investor attention is focused on the third-quarter preliminary earnings announcements from Samsung Electronics and LG Electronics. Securities firms have projected the KOSPI index to range between 2500 and 2640 this week.

According to the Korea Exchange on the 6th, the KOSPI index closed at 2569.71 on the 4th, up 8.02 points (0.31%) from the previous trading day (the 2nd). Last week, the domestic market operated for only three trading days due to the Armed Forces Day (the 1st) being designated as a temporary holiday, combined with the National Foundation Day holiday on the 3rd. During this period, individual investors were the sole net buyers in the securities market, purchasing a net amount of 2.2451 trillion KRW, while foreigners and institutions were net sellers of 1.2696 trillion KRW and 1.1367 trillion KRW, respectively.

This week, attention should be paid to the earnings season starting with Samsung Electronics. Samsung Electronics and LG Electronics will announce their third-quarter preliminary earnings on the 8th.

Lee Kyung-min, a researcher at Daishin Securities, stated, “The announcement of Samsung Electronics’ earnings guidance is expected to be the trigger for a turnaround in the semiconductor sector,” adding, “A rebound attempt is anticipated among undervalued and oversold stocks relative to earnings.”

There are also opinions suggesting that expectations for Samsung Electronics’ third-quarter earnings should be lowered.

Kim Young-hwan, a researcher at NH Investment & Securities, analyzed, “The consensus for Samsung Electronics’ earnings (average forecast by securities firms) is sales of 81 trillion KRW and operating profit of 11 trillion KRW,” and added, “Demand for DRAM excluding high-bandwidth memory (HBM) and average selling price (ASP) increases are expected to fall short of market expectations, making the results likely to be disappointing compared to initial forecasts.”

NH Investment & Securities analyzed that uncertainties related to the US elections and renewed geopolitical risks in the Middle East will be factors causing the stock market to decline. However, concerns about a US economic recession have eased, and due to factors such as reduced worries about unwinding yen carry trades and expectations for economic stimulus in China, the KOSPI index is expected to move within the 2500 to 2640 range this week.

On the other hand, there is also a view that the impact of Middle East risks on the stock market will be limited. Researcher Lee Kyung-min explained, “Although fear of escalation in the Middle East was maximized due to Iran’s airstrike, this follows a pattern similar to April and the likelihood of the worst-case scenario unfolding is low,” adding, “It is also important to consider that past geopolitical issues had a limited impact on market trends.”

Kim Jong-min, chief researcher at Samsung Securities, said, “Important events that will determine the market’s direction are scheduled this week,” adding, “Final decisions on financial tax policies, Samsung Electronics’ third-quarter earnings announcement on the 8th, Tesla’s RoboTaxi Day on the 10th, September CPI, and the Bank of Korea’s Monetary Policy Committee meeting are all scheduled, so market volatility is expected to increase.”