2024-02-10 08:29:19
At the beginning of the year, global stock markets such as the U.S. and Japan cruised to new highs, but domestic stock markets appeared to be neglected. This is due to a combination of concerns regarding China’s economic slowdown and weakening expectations of an early interest rate cut in the United States.
The government’s stock market stimulus plan, the ‘Corporate Value Up Program’, is expected to gain momentum following the Lunar New Year holiday when large-cap companies’ earnings announcements are concluded. As interest is growing centered on low PBR stocks with a price-to-book ratio (PBR) of less than 1x, there is the prospect that ‘sorting out the rocks’ among low PBR theme stocks is now in full swing.
According to a survey of KOSPI forecasts following the Lunar New Year holiday conducted by Maeil Business Newspaper on the 10th among research center heads at major domestic securities companies, the average band was 2455 to 2683. The lower end rose by regarding 200 points and the upper end fell by regarding 100 points compared to the average KOSPI forecast for 2024 of 2260-2790 surveyed at the end of last year. Jong-Woo Yoo, head of the Korea Investment & Securities Research Center, who presented the highest KOSPI band in this survey, said, “The KOSPI in February is expected to increase its high point, focusing on the low PBR theme, which is expected to benefit from the corporate value up program.” “As the stock exchange’s demand for improvement measures for companies with a PBR of less than 1x has been a signal for the rise of the Japanese stock market, net buying by foreigners expecting similar policy effects may flow in, creating a favorable environment for supply and demand,” he explained.
There were many comments that there would be more good news than bad news in the domestic stock market in the first half of the year. There is an analysis that the driving force is expected to drive stock prices, such as China’s expansion of economic stimulus measures such as lowering the reserve requirement ratio and the United States’ interest rate cut becoming visible.
Yoon Chang-yong, head of the Shinhan Investment & Securities Research Center, said, “There are expectations that the recovery in the information technology (IT) industry based on artificial intelligence (AI) will continue and that China will strengthen its stimulus measures.” “As the rate cut trend has been maintained, it is necessary to include value stocks,” he said.
Park Hee-chan, head of Mirae Asset Securities Research Center, also said, “What is important is that a change in policy has been declared with an interest rate cut, so it is not important whether the interest rate is lowered in March or not.” He added, “Interest rates can be cut more than three times this year, and 300bp (1bp= “We can expect an interest rate cut of regarding 0.01 percentage points,” he claimed.
Most research center directors unanimously selected semiconductors as the industry expected to be the most promising following the holidays. Oh Tae-dong, head of the NH Investment & Securities Research Center, said, “The core driving force of the Korean economy is increased exports, and exports are expected to increase, especially in the United States.” He added, “Exports are expected to increase in the ‘semiconductor’ industry related to AI,” adding that Samsung Electronics and SK Hynix It was selected as a recommended item. Center Director Yoo, who selected Samsung Electronics as a TOP-Pick stock, also said, “The generative AI theme is expected to solidify its position as it receives attention as a productivity improvement tool,” adding, “Due to improved memory performance, DRAM in the first quarter of 2024 “We recommend Samsung Electronics, which is expected to turn a profit, and Jusung Engineering, which is expected to benefit the most this year as investments in DRAM equipment are concentrated,” he said.
Financial and automobile stocks, which are representative of low PBR stocks, were also selected as recommended industries, as policy expectations will remain until the specific policy details of this month’s corporate value up program are announced. Lee Jong-hyung, head of Kiwoom Securities’ research center, said, “Once the corporate value up program becomes concrete, the low PBR theme is expected to be more central to the market than other themes.” “It is appropriate to respond,” he explained.
As expectations for government policies are reflected in advance, there is also a prediction that the domestic stock market will take a ‘breather’ in the short term. Lee Kyung-soo, head of Meritz Securities Research Center, said, “We cannot rule out the possibility that we will enter a period of breathing as expectations for corporate value-up programs are reflected in advance,” and added, “Whether stocks will be singled out or spread will be determined depending on the effectiveness and sustainability of the policy.” mentioned.
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