IBK Investment & Securities: Stock Market Nearing Short-Term Bottom, Entering Buying Opportunity Zone

As the domestic stock market is expected to be approaching a short-term bottom, analysts suggest that this could be seen as a buying opportunity at lower prices.

On August 21, Byun Junho, a researcher at IBK Investment & Securities, stated, "Considering the scale of the market's decline, various market-related indicators, and upcoming events, the stock market is expected to pass through a short-term bottom either later this week or in the early to mid part of next week."

Byun cited several factors supporting the imminent bottom in the market: improvement in domestic fundamentals, the possibility of a government policy shift, resistance at the KRW-USD exchange rate of 1,400 won, support levels for Samsung Electronics' stock price, and the upcoming earnings report from Nvidia.

He explained, "When comparing the scale of the recent short-term correction that occurred during the process of fundamental improvement to previous cases, it is likely that much of the adjustment has already been reflected. Currently, domestic economic and earnings outlooks are showing signs of some improvement, with this year's growth consensus slightly revised up to 1% and next year's growth consensus being maintained at around 1.8%."

He added, "Key economic indicators are rebounding, quarterly growth rates are improving, and short-term economic concerns are easing. Earnings forecasts are also maintaining a moderate recovery trend and expectations for improvement."

From a policy perspective, he analyzed that the recent weakness in the stock market is increasing the likelihood of a review of tax reforms, major shareholder requirements, and dividend policies. He said, "Following the announcement of the reform plan, the National Assembly and the government have begun to partially review the tax reform through meetings and communication with the market. It is expected that they will pay even closer attention to issues that are of high concern to market participants."

The KRW-USD exchange rate is also approaching 1,400 won, increasing the likelihood of resistance at this level. As expectations for a U.S. interest rate cut are rising, he predicted that the exchange rate is unlikely to break through 1,400 won decisively. He also assessed that Samsung Electronics, which recently declined to around 70,000 won near its 20-day moving average, could find support at current levels.

Finally, Nvidia's earnings report, scheduled for release on August 27, was cited as a variable that could influence short-term market sentiment. He emphasized, "Whether the second-quarter results exceed consensus will be a key factor in determining short-term sentiment for artificial intelligence (AI). If the results fall short of expectations, there is a possibility that concerns about an AI bubble could intensify."