KOSPI Trapped in a Box Range... Will It Heat Up in August?

[Image source=Yonhap News]

[Asia Economy Reporters Junho Hwang, Seonae Lee] With a mega initial public offering (IPO) earlier this month and earnings announcements drawing investors' attention to secondary batteries and other sectors, there is growing interest in whether the stock market will be revitalized.

According to the Korea Exchange on the 2nd, the average closing price of the KOSPI last month was 3,254.57. After surpassing 3,300 at the end of June, it has been trapped in a box range for a month. However, signs of a changing atmosphere have emerged this month. First, a mega IPO is underway. Krafton is conducting its public offering subscription from today until tomorrow. Krafton's public offering size reaches 4.3098 trillion won, making it the second largest in the domestic IPO market after Samsung Life Insurance (4.8881 trillion won). Based on the offering price, its market capitalization is expected to exceed 24 trillion won, positioning it as the leading domestic game stock.

The market sentiment is also positive. Peripheral funds around the stock market have grown significantly. As of the 30th of last month, investor deposits exceeded 75 trillion won, the second highest figure since May 3rd when it reached 77 trillion won. This is analyzed as a result of the refund of deposits from the KakaoBank IPO at the end of last month and funds gathered for Krafton's subscription.

Earnings catalysts are still alive. On the 4th, SK Innovation, SK IE Technology (SKIET), and EcoPro BM will simultaneously announce their second-quarter earnings for this year. The securities industry expects SK Innovation's second-quarter sales to exceed 11 trillion won, increasing by more than 50% compared to the same period last year, and operating profit to surpass 600 billion won, achieving a turnaround to profitability.

On the 6th, Kakao, which is fiercely competing with Naver for the third-largest market capitalization, will release its second-quarter earnings. According to financial information provider FnGuide, the average consensus estimate from the securities industry for Kakao's Q2 earnings is sales of 1.3496 trillion won and operating profit of 179.6 billion won, representing sharp increases of 41.6% and 83.7% respectively compared to the same period last year.

However, not all views are positive. Some expect a correction this month. KB Securities has set the expected KOSPI band for this month between 3,070 and 3,410. Eun-taek Lee, a researcher at KB Investment & Securities, said, "There is still a possibility of a correction in summer," adding, "This should be seen not as the start of a bear market but as a transition to a bull market." He further predicted, "After summer, sector rotation will conclude, and leading stocks will emerge," and "After summer, the real competition will begin."

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