KIC Discusses Outlook on US Stock Market with Domestic Institutions Entering New York

The 2nd New York Financial Professionals Forum Held
BlackRock: "Regional Banks Stabilizing... Current Investment Environment Is Challenging"

The sovereign wealth fund KIC organized a meeting in New York where Korean financial professionals and local experts gathered to discuss this year's stock market outlook.

Korea Investment Corporation announced that, under the auspices of its New York office, it held the 2nd 'New York Korean Finance Forum' at the New York Consulate General on the morning of the 25th (local time).

The forum was attended by more than 20 investment officers from the Korean Embassy in the U.S., including the Economic Counselor, government, public investment institutions, securities firms, banks, and insurance companies.

The meeting began with a presentation by BlackRock titled "2023 U.S. Regional Bank Crisis and Stock Market Outlook." BlackRock is the world's largest asset management company, managing approximately $9.1 trillion as of the end of Q1 this year.

David Zhao, Head of the U.S. Income & Value division, described Silicon Valley Bank (SVB), which triggered the recent regional bank crisis, as "a definite outlier (A Big Outlier)." He noted that it is a case difficult to generalize due to factors such as the proportion of uninsured deposits.

He stated, "After the U.S. government responded swiftly to the First Republic Bank (FRC) incident, the deposit sizes of PacWest Bank, East West Bank, and Western Alliance Bank?banks that were rumored to be in crisis?actually increased," adding, "The Federal Reserve's emergency lending volume has also fallen below the 2008 level."

Zhao evaluated the current investment environment as "still challenging." Although inflation is easing, the unprecedented tightening cycle has increased the possibility of a recession.

However, he assessed that attractive opportunities still exist in U.S. equities. He said, "The current valuation level of the Standard & Poor's (S&P) 500 index is not high," and "the market is now focusing on corporate earnings."

He added, "Attention should be paid to high-quality stocks with stable earnings or low price volatility, and stocks that can improve profit margins through cost reductions."

Among sectors, he saw opportunities in healthcare, citing that earnings remain stable even during recessions and that its valuation level is lower compared to the S&P 500 index.

Lee Kyung-taek, head of KIC's New York office and organizer of the New York Korean Finance Forum, said, "Amid ongoing concerns about the spread of the regional bank crisis, this was a meaningful discussion on the future market direction ahead of the second half of 2023," and added, "We will continue to create opportunities for Korean institutional investors to come together and share wisdom."

KIC has overseas offices in global financial hubs including New York and San Francisco in the U.S., London in the U.K., and Singapore. It strives to share overseas investment information and build cooperative systems with domestic public and private financial institutions operating locally.

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