The Market Awaits the FOMC... Major Event: SK Bioscience IPO

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] This week (15th-19th), the domestic stock market is expected to remain cautious ahead of the U.S. Federal Open Market Committee (FOMC) decision.

According to the Korea Exchange on the 14th, the KOSPI closed last week at 3,054.39, up 1.35% from the previous trading day. The KOSDAQ ended at 925.49, up 1.93%. The domestic stock market, which started higher thanks to gains in the U.S. stock market, extended its gains supported by simultaneous buying from institutions and foreigners, closing higher. However, the market is expected to show a cautious stance rather than maintaining a clear upward trend as the FOMC meeting on the 17th approaches.

Labor Gil, a researcher at NH Investment & Securities, said, "The global stock market is reacting sensitively to changes in U.S. market interest rates, and as the FOMC meeting on the 17th approaches, the cautious sentiment is expected to gradually increase." He predicted that the KOSPI, influenced by the global market, will fluctuate between 2,950 and 3,150.

Recently, the KOSPI is evaluated to be continuously reducing its overvaluation burden. The 12-month forward price-to-earnings ratio (PER) of the KOSPI rose to 14.7 times at the end of January but dropped to 13.1 times as of the 11th. Researcher Noh said, "Earnings per share are improving, which is helping to ease the overvaluation burden," adding, "The gradual reduction of overvaluation burden due to upward revisions in earnings estimates of domestic companies is a factor that makes buying during corrections effective."

A major event in the domestic stock market is the listing of SK Bioscience on the KOSPI market. Amid the recent sluggish price movement of healthcare-related stocks in the domestic stock market, attention is also focused on how much the SK Bioscience listing will affect the stock prices of comparable companies. SK Bioscience, which will be listed on the 18th, has a public offering size of 1.4918 trillion KRW. The subscription for public offering shares conducted on the 9th and 10th attracted deposits of 63.6198 trillion KRW, surpassing the previous record of 58.5543 trillion KRW set when Kakao Games was listed on the KOSDAQ market in September 2020.

Meanwhile, if the Federal Reserve succeeds in stabilizing the market at the FOMC meeting, it is expected that investment sentiment toward technology stocks will quickly recover. There is also a possibility that the $1.9 trillion disaster relief fund from the U.S. economic stimulus package will flow into the stock market. Han Dae-hoon, a researcher at SK Securities, analyzed, "If the market stabilizes at the March FOMC, investment sentiment in technology stocks will quickly recover," adding, "Conversely, even if disappointment arises, the $1,400 disaster relief payments resulting from the passage of the $1.9 trillion U.S. economic stimulus package are positive for the stock market."

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