Korean media: KOSPI breaks 4,400 points to set a new historical high: "The semiconductor market is far from over"

On the 5th, the South Korean Composite Stock Price Index (KOSPI) crossed the 4,400-point threshold. Following its first record of 4,300 points on the 2nd, it set a new high for two consecutive trading days. Despite the international situation becoming unstable due to the US removing Venezuelan President Nicolas Maduro, the impact on the domestic stock market was minimal that day.

On the 5th, according to the Korea Exchange, the KOSPI rose 3.43% compared to the previous trading day, closing at 4,457.52 points. Foreign investors made a net purchase (buying - selling) of 2.1666 trillion won worth of stocks, driving the index higher. Foreign investors took over the stocks that individuals and institutions sold off (net selling) 1.51 trillion won and 70.24 billion won respectively that day. The depreciation of the Korean won was somewhat alleviated, and combined with expectations of a "semiconductor super cycle," this drove stock prices up sharply. Samsung Electronics will release its fourth-quarter performance on the 8th, and some in the market predict that Samsung Electronics' quarterly operating profit may exceed 20 trillion won for the first time.

Samsung Electronics closed at 138,100 won that day, rising 7.47% compared to the previous trading day, setting a new record high again. SK Hynix rose 2.81% compared to the previous trading day, closing at 696,000 won, reaching as high as 700,000 won during the day.

On the 1st, the export performance announced by the Ministry of Trade, Industry and Energy of South Korea was also one of the positive factors leading to the KOSPI's strong rise at the beginning of the year. In December last year, semiconductor exports reached 20.77 billion US dollars, an increase of 43.2% year-on-year. Export volumes have maintained a growth trend for 10 consecutive months, setting a record for the highest export performance in any December in history. Seo Jung-hoon, head of the research team at Samsung Securities, said, "This export trend shows that despite the controversy over excessive investment in semiconductors, actual demand remains strong," and "this will become the basis for sustained support of earnings expectations for companies related to artificial intelligence (AI) infrastructure, including semiconductors."

Predictions for the high point of the KOSPI have also increased. On the same day, Lee Kyung-min, a researcher at Daisan Securities, said, "The momentum of improvement in semiconductor performance has been stronger and faster than expected," and set the KOSPI range for this month between 4,100 and 4,500 points. He also pointed out that "if the Korean won stabilizes and attracts foreign investors to join the net buying group, it is highly likely that the KOSPI will enter the 5,000-point era in the first quarter of this year." Song Myung-suk, a researcher at iM Securities, also said, "In recent times, the semiconductor stock price has been more influenced by the company's own competitiveness than macroeconomic factors such as liquidity," and raised the target prices for Samsung Electronics and SK Hynix to 160,000 won and 870,000 won respectively.

Experts pointed out the phenomenon of "over-reliance on semiconductors" while also focusing on the possibility that the South Korean stock market will still be dominated by semiconductors this year. Experts particularly paid attention to the semiconductor "components" (materials, parts, equipment) stocks hidden behind Samsung Electronics and SK Hynix. The stock price of Hanmi Semiconductor, which produces the core equipment for high-bandwidth memory (HBM), TC bonding machines, also surged about 16% compared to the previous trading day that day.

Yu Da Securities stated, "The total operating profit of domestic semiconductor companies in the fourth quarter of last year may exceed market expectations, and the second phase of the upward cycle, where both price increases and shipment increases are expected this year, is worth looking forward to."

On the other hand, nuclear energy stocks also showed a strong upward trend. That day, Doosan Energy closed at 83,200 won, rising 10.64% compared to the previous trading day. Doosan Energy had risen 329% throughout last year, ranking seventh in the KOSPI gain list. Modern Construction and Hanil Technology, classified as nuclear energy stocks, also rose about 7% and 4%, respectively, compared to the previous trading day. Expectations for the U.S. Department of Energy (DOE) executing a small modular reactor (SMR) support budget, as well as discussions in the domestic market about designating SMR as a national strategic technology, stimulated investor sentiment.

Source: JoongAng Ilbo

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Original: toutiao.com/article/1853534766950476/

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