"Domestic Stock Market Requires Focused Response on Stocks with Active Momentum"

Korea Investment & Securities analyzed on the 6th that a selective approach focusing on stocks with momentum is still necessary for the domestic stock market.

Yeom Dong-chan, a researcher at Korea Investment & Securities, said, "Foreign investors are net selling Korean semiconductors, not Korean stocks," and added, "Foreign demand should be viewed separately for domestic semiconductor companies and non-semiconductor companies." He continued, "If we exclude foreign net purchases of Samsung Electronics and SK Hynix from the total foreign net purchases, it is difficult to say that foreign investors have been net sellers of domestic stocks in the second half of the year," and analyzed, "The recent net selling by foreign investors is not a net selling of Korean stocks but a process of reducing the proportion of semiconductors with earnings uncertainty."

Ultimately, Yeom emphasized the need for a selective approach focusing on stocks with momentum. He said, "Reducing the proportion of domestic stocks unconditionally in a situation where valuation levels are low is not the right response," and added, "Attention is needed for stocks with earnings and demand momentum. Even in a situation where there are concerns about market earnings, stocks with upwardly revised earnings and net purchases by foreign investors fall into this category."

Researcher Yeom predicted the KOSPI bottom level to be around 2340 points. He said, "Among price-to-book ratios (PBR), the most conservative TTM (trailing twelve months) basis shows that the valuation bottom that can be rationally considered was about 0.86 times in October last year, when concerns about tight monetary policy peaked," and pointed out, "Converted to the KOSPI, this is about 2340 points."