What Is the Biggest Concern of Foreign Retail Investors? Individual Stocks' 'Earnings Improvement'

Samsung Securities, Survey of Over 1,800 Participants

[Asia Economy Reporter Park Jihwan] Domestic investors investing in overseas stocks have shown greater interest in the expectation of ‘earnings improvement’ of individual stocks rather than concerns about the ‘U.S. 10-year Treasury yield,’ which has rapidly risen since the beginning of the year and emerged as a major market keyword.

Samsung Securities announced on the 7th that this was revealed in a survey conducted on 1,868 participants of the ‘Untact Conference’ held on the 31st of last month.

Among the respondents, 48% answered that the ‘most influential factor in investment decisions’ was ‘earnings improvement of individual holdings.’ The ‘recent theme movements attracting market attention’ (33%) ranked second, indicating a move to increase profitability by quickly following themes amid stagnation in large-cap stocks.

The proportion of respondents who answered ‘whether the U.S. Treasury yield will continue to rise’ was only 16%, showing a positive market outlook despite the recent slowdown in the stock market’s upward trend. Regarding interest rate forecasts, only 7% expected the U.S. 10-year Treasury yield to exceed 2% and continue a steep rise by the end of this year, indicating that the majority view is that the rise in interest rates will be limited going forward.

Opinions that a negative impact on stock investment would begin in earnest if the yield exceeds 2% accounted for 45%. This suggests that an annual yield of 2% on the U.S. 10-year Treasury is considered an important criterion for judging the attractiveness of stock investment.

In response to the question, ‘Which overseas market do you think is promising in the second quarter?’ over 70% chose ‘the United States.’ China (17%), Europe (9%), and Emerging markets (3%) followed. When asked about ‘promising stocks,’ preferences for value stocks and technology stocks were close, at 52% and 48%, respectively. Samsung Securities explained that this reflects a market character transition from a liquidity-driven phase to an earnings-driven phase.

The market news that most influenced their investment recently was the news of Coupang’s listing on the New York Stock Exchange (27%). This was followed by Elon Musk’s remarks related to cryptocurrency (25%) and news of the U.S. economic stimulus bill passing Congress (22%).

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