"Positive Outlook for Media, Chemicals, and Food & Beverage in the Rebound Phase"

On the afternoon of the 27th, when the KOSPI closed higher, an employee is working in the Hana Bank dealing room in Jung-gu, Seoul. (Photo by Yonhap News)

[Asia Economy Reporter Geum Bo-ryeong] Amid the stock market's instability due to the novel coronavirus disease (COVID-19), an analysis suggests that media, chemical, and food and beverage sectors will perform positively during the rebound phase.

According to the Korea Exchange on the 30th, the KOSPI closed at 1717.73 on the 27th, up 1.87% from the previous trading day. Compared to the sharp drop to 1482.46 on the 23rd, breaking below the 1500 level, the market has shown a gradual rebound over four trading days.

It is analyzed that media stocks will stand out more during the rebound phase. Media stocks have already shown growth potential thanks to COVID-19. In particular, increased indoor activities due to COVID-19 lead to higher demand for video-on-demand (VOD) content and increased viewership, benefiting content producers and online video services (OTT) through increased VOD sales. KB Securities researcher Lee Eun-taek explained, "Even if the spread of COVID-19 subsides, if new confirmed cases remain at around 30 to 40 per day and some level of 'social distancing' continues, growth in this sector will accelerate."

From a short-term perspective, chemical stocks are also expected to benefit. Low oil prices are expected to continue in the first half of the year, and if expectations for economic recovery arise under these conditions, momentum in chemical product spreads is likely to be favorable. In the second half of 2015, despite economic concerns due to capital outflows from China, chemical stocks outperformed due to falling oil prices. The researcher added, "However, it is still too early to judge long-term demand recovery, so we are focusing only on short-term momentum during the index rebound."

The food and beverage sector was also identified as a preferred industry. The easing of cost burdens due to falling grain prices similarly benefits the food and beverage sector. DB Financial Investment Research Center noted, "It is important to watch that processed food companies with a high B2C ratio will experience favorable business conditions," and analyzed, "Stocks in the food and beverage sector, which have seen increased dividend yields, become attractive investment targets not only for a mid-term rebound but also for conservative and long-term investors."

This content was produced with the assistance of AI translation services.