[Weekly Market Outlook] KOSPI Breaks 2800 Level and Sets Record Highs, What Will Be the Year-End Closing Price?

Index Reflects Dividend Expectations... Some Stocks May Experience Large Ex-Dividend Drops
Year-End and New Year Event to Watch: 'Byeonjong Corona'
Trump's Stubbornness Demanding Stimulus Package Revisions Also a Variable

[Asia Economy Reporter Oh Ju-yeon] The KOSPI surpassed the 2800 mark on the 24th, setting a new all-time high, with only three trading days left until the market closes for the year. Securities firms are placing more weight on the possibility that the KOSPI may undergo a correction rather than further rise from its current level during the last week of December.

On the 27th, NH Investment & Securities predicted that the KOSPI would move between 2700 and 2780 during the last week of December (28th to 30th). While expectations for economic recovery and the distribution of COVID-19 vaccines are positive factors, the possibility of re-lockdowns due to the spread of COVID-19 is cited as a negative factor. In particular, since dividend-related expectations are already significantly reflected at the current KOSPI level, stocks with high expectations for dividend policies may experience a large dividend drop.

Labor Gil, a researcher at NH Investment & Securities, explained, "Dividend-related expectations are substantially reflected at the current KOSPI level, and these expectations are concentrated on stocks within the KOSPI 200 that are expected to improve their dividend policies rather than traditional dividend stocks." He added, "In an environment where foreigners are increasing domestic exposure mainly through futures, the relative returns of large-cap stocks may somewhat slow down until the end of the year," and forecasted, "The point at which the relative returns of large-cap stocks can rise again is early 2021, when foreign investors are expected to switch to net buying of spot stocks."

Researcher Roh mentioned, "For some large-cap stocks within the KOSPI 200, such as IT and holding companies, where dividend policy improvements are expected, a strategy to increase weighting at the opening price on the ex-dividend date is likely to be effective," and diagnosed, "Given that foreign investors are expected to net buy spot stocks when the price gap between spot and futures normalizes, it is necessary to pay attention to sectors like semiconductors, secondary batteries, and healthcare, which have consistently been favored by foreign investors."

SK Securities identified events that could impact the market through the remaining year-end and early next year, including the U.S. economic stimulus package and news related to variant viruses.

The U.S. Congress passed a $2.3 trillion budget bill containing the COVID-19 stimulus package and the federal government's 2021 fiscal year budget on the 21st, and sent it to President Trump on the 24th. However, President Trump rejected the stimulus package, demanding a revised bill with increased COVID-19 aid.

Han Dae-hoon, a researcher at SK Securities, said, "The $900 billion fifth economic stimulus package, which the U.S. Congress barely agreed on, has been stalled," adding, "If President Trump does not sign the bill by the 28th, the federal government will shut down. Whether a new revised bill will be processed and whether the scale will be expanded are among the biggest concerns at the end of this year."

He also noted that attention is focused on the news that global pharmaceutical companies have started vaccine efficacy tests against variant viruses.

Researcher Han evaluated, "At this point, when news about the development and approval of COVID-19 vaccines is emerging, whether existing vaccines prove effective against variant viruses is very important as it is linked to expectations for the resumption of economic activities."

Currently, Pfizer and BioNTech are testing whether their vaccine can cope with variant viruses and have stated that at least two more weeks are needed, while Moderna is also expected to conduct additional tests over the coming weeks.

Researcher Han said, "Since variant viruses are known to be more than 70% more infectious than existing viruses, the efficacy of vaccines is a crucial point to watch," and diagnosed, "Ultimately, COVID-19 and President Trump's obstinacy, which had the greatest impact on the market this year, have emerged as important variables through the remaining year-end and early next year."

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