[MarketING] Will It Become an Upward Momentum... Expectations for Nvidia Earnings and Value Upgrades

The domestic stock market is expected to show an upward trend this week (February 19-23). This is due to the recovery in demand for low PBR stocks ahead of the announcement of specific implementation plans for the corporate value program, and the anticipated rally of AI semiconductor stocks ahead of Nvidia's earnings announcement. Securities firms have projected the KOSPI index range for this week to be between 2540 and 2660. Some suggest that as the Q4 earnings season winds down, highlighting a lack of momentum, a selective approach focusing on stocks with specific issues is necessary.

On the 15th, the KOSPI index opened at 2,643.81, up 23.39 points (0.89%) from the previous trading day, as dealers were working at the Hana Bank headquarters in Jung-gu, Seoul. On the same day, the won-dollar exchange rate opened at 1,332 won, down 3.4 won. Photo by Jinhyung Kang aymsdream@

"Thank You Foreigners"... Slowdown in Low PBR Stocks' Uptrend and Growth Stocks' Rebound

Until January, the KOSPI index showed sluggish movement but closed at 2648.76 on the 16th, marking an increase compared to the previous week. Although it rose more than 1% on the first trading day after the Lunar New Year holiday, it gave back midweek gains and ended last week around the 2640 level.

The index was driven by foreigners and institutions. Foreigners and institutions purchased 1.624 trillion KRW and 168.5 billion KRW respectively last week. Notably, foreigners led the market by buying 9.646 trillion KRW in the KOSPI market from February 2 to 16. The stocks foreigners added to their baskets were low PBR stocks such as Hyundai Motor, Kia, KB Financial, and Hana Financial, which have attracted attention due to the implementation of the corporate value program.

However, around the Lunar New Year holiday, the uptrend in low PBR stocks slowed, and growth stocks, which had been somewhat neglected, rebounded, resulting in a rotation market. Donggil Noh, a researcher at Shinhan Investment Corp., explained, "It is difficult to find a clear reason for the decline in stocks related to the value-up program, and the three-week rise mainly in value stocks can be interpreted as entering a rotation phase. The price trend of related stocks will likely be determined by the policy intensity to be announced at the end of this month."

Demand for Increased Shareholder Returns Expected to Intensify in This March's General Meeting Season... Which Stocks to Watch?

The securities industry projects the KOSPI range for this week to be between 2540 and 2660. Expectations for Nvidia's earnings announcement and the detailed announcement of the corporate value program are expected to influence the market.

Junho Hwang, a researcher at Sangsangin Securities, said, "If the government authorities announce details of the corporate value-up program, foreign investors' sentiment toward the low PBR theme is likely to recover, potentially leading to another upward trend."

Nvidia, which recently surpassed Amazon in market capitalization based on closing prices, will announce its earnings on the 21st (local time). On the same day, the minutes of the January Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve will also be released.

Younghwan Kim, a researcher at NH Investment & Securities, analyzed, "Expectations for AI growth, a robust U.S. economy, and the corporate value-up program will act as positive factors for the stock market. However, as the Q4 earnings season approaches its end, corporate earnings and major stock market variables are entering a gap period where they do not provide clear momentum to the stock market."

Accordingly, he emphasized the need for a selective response strategy focusing on stocks affected by these issues.

The securities industry expects demands for increased shareholder returns to be stronger than ever during this March's shareholder meeting season. Companies such as Samsung C&T, Hyundai Elevator, Samyang Group, and the seven major financial holding companies are facing demands from activist funds for expanded shareholder returns. This underscores the need to establish strategies targeting the March shareholder meeting season.

Researcher Donggil Noh stated, "Among the major events scheduled for March, the biggest variable is the shareholder meeting season. The frequency of shareholder return reviews during this year's shareholder meeting season is expected to increase compared to last year. A response strategy focusing on stocks with high shareholder return yields is necessary."

He added, "HD Hyundai Infracore, Hugel, Kia, Woori Financial Group, JB Financial Group, and SK Telecom rank high in shareholder return yields among companies with market capitalizations exceeding 1 trillion KRW."

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