Korea Investment & Securities: "Overheating Concerns? KOSPI to Continue Upward in November... IT Still Leads"

Korea Investment & Securities diagnosed on November 3 that the KOSPI is expected to continue its upward trend in November, stating that despite concerns over overheating, the direction of foreign net buying will remain focused on the 'IT sector'.

Kim Daejun, a researcher at Korea Investment & Securities, stated in a report titled "Overheating Concerns? IT Still Feels the Most Comfortable" released on the same day, "The leading IT sector index is expected to drive the index higher in November as well."

Researcher Kim explained, "There are clear reasons why foreigners have a positive outlook on IT. The earnings outlook for Korea's IT sector is improving. Looking at the 12-month forward EPS based on the MSCI index, the EPS slope for the IT sector is already similar. This indicates that Korea's IT industry is also being influenced by the artificial intelligence (AI) growth led by Nvidia." In other words, there is no reason not to buy.

He acknowledged, "There are some concerns about overheating," but pointed out that various stock market stimulus measures are currently having a positive effect on the market. He also said, "The export and import trends announced at the beginning of the month are not bad," and added, "Given that the KOSPI shows a direct correlation with average daily exports, it is reasonable to maintain an optimistic outlook for the stock market."

Exports in October increased by 3.6% year-on-year despite a decrease in the number of working days due to the Chuseok holiday. Average daily exports rose by 14%. By item, semiconductors-which have recently driven the stock market-recorded a 38% year-on-year increase in average daily exports. Strong export performance was also observed in IT sectors such as computers and displays.

Researcher Kim noted, "Last week, other sectors besides IT also rose thanks to the Asia-Pacific Economic Cooperation (APEC) summit effect, but IT remains at the core of the Korean stock market." He continued, "In particular, the semiconductor and hardware sectors are enjoying strong exports, improved earnings, and favorable supply-demand conditions. There is absolutely no reason to change a positive investment view on IT." He added, "Even if concerns over overheating shake the market, the IT sector is likely to be the most stable in terms of stock prices."

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