"High-Net-Worth Investors Managing 10 Trillion Won: 'Gangnam Wealthy Also Feel FOMO... Increasing Investments in Samsung and SK hynix' [Investment Strategies of the Wealthy]③"

Interview with Jongho Kang, Head of Shinhan Investment Corp. PIB Gangnam Center

"Also Watching Biotech, Refining, and Defense Sectors"

Use a Phased Selling Strategy When Peak Events Occur

Wealthy Investors Are Sensitive to Taxes... St

"Recently, wealthy individuals have been increasing their allocation to stocks. Previously, the ratio between stocks and safe assets such as deposits and bonds was 4 to 6, but now it has reversed to 6 to 4."

Jongho Kang, Shinhan PIB Gangnam Center, is speaking in an interview with The Asia Business Daily on the 23rd of last month. Shinhan Investment Corp.

Jongho Kang, Head of the Shinhan Investment Corp. PIB Gangnam Center, stated in a recent interview with The Asia Business Daily that high-net-worth individuals are expanding their investments in stocks. He explained, "Recently, the share prices of semiconductor stocks such as Samsung Electronics and SK hynix have surged, which has led to a sense of FOMO (fear of missing out) among wealthy investors. This trend has become particularly noticeable since the end of last year."

The Shinhan PIB Gangnam Center provides comprehensive asset management services for high-net-worth individuals by combining the strengths of private banking (PB) and investment banking (IB), offering one-stop solutions for investment products, real estate, tax, and more. The assets managed at this center exceed 10 trillion won, and there are about 300 clients with assets of more than 3 billion won each. Kang joined Shinhan Investment Corp. in 1997 and has been an expert in the stock market for 30 years. He took up the role as head of the PIB Gangnam Center earlier this year.

The main area of interest for high-net-worth individuals is semiconductors. Kang commented, "Korean leading semiconductor companies such as Samsung Electronics and SK hynix have been delivering strong results and frequently appear in the media, which is attracting a lot of attention. For Samsung Electronics and SK hynix, clients tend to make direct individual stock investments, while for other semiconductor stocks, they prefer listed ETFs, which allow for greater volumes of investment and easier liquidation later."

Jongho Kang from Shinhan PIB Gangnam Center is speaking in an interview with The Asia Business Daily on the 23rd of last month. Shinhan Investment Corp.

The biggest question among high-net-worth individuals is how long the so-called 'semiconductor rally' will last. Kang stated, "With semiconductor stocks soaring, many clients are asking whether we are at the peak or if there is further upside potential. However, it's impossible to know the peak in advance and respond preemptively."

Instead, Kang suggests a strategy of taking profits in stages. He explained, "In a market with strong liquidity like the current one, it is wise to sell gradually as the stock price peaks and slightly pulls back. During recent earnings events, I advised high-net-worth clients to sell 20% of their holdings, and the next plan is to consider selling another 20% if the consensus for the second quarter of this year is established."

Outside of semiconductors, Kang recommended pharmaceutical and biotech companies that have signed contracts with global big pharma firms. He said, "Although semiconductor stocks have surged, there will inevitably come a time when this concentrated trend in the stock market subsides. Recently, the pharmaceutical and biotech sectors have seen significant declines in share prices due to reduced credibility, but with policy support such as the National Growth Fund and productive finance, this is a good time to invest."

Kang also mentioned the need to consider industries that can withstand high oil prices, such as refining and defense. He added, "Unlike at the beginning of the war, investors have developed a 'TACO (Trump Always Chicken Out)' learning effect and are now focusing more on fundamentals and policies rather than just headlines. Still, as concerns about war have not completely disappeared, I recommend sectors that can weather the period of high oil prices for now."

Jongho Kang, Shinhan PIB Gangnam Center, spoke in an interview with The Asia Business Daily on the 23rd of last month. Shinhan Investment Corp.

Tax issues, such as the financial investment income tax and inheritance and gift taxes, are also a major concern for high-net-worth individuals. The PIB Gangnam Center has dedicated professionals specializing in tax issues at the group level and holds customized seminars for clients. Kang said, "For high-net-worth individuals, saving on taxes is more important than earning money. Tax saving is not just about keeping more money, but is a core factor that determines the sustainability of their investments."

Interest in virtual assets among high-net-worth individuals remains relatively low. Kang explained, "Only those who became wealthy through startups ask about trends in stablecoins, but not to the extent that funds are moving. High-net-worth individuals tend to invest in new asset classes later than others, and as virtual assets are not yet institutionalized, it is difficult for them to show much interest."

Finally, Kang expressed confidence in the advancement of Korea’s stock market. He said, "Global investment banks have set their KOSPI targets as high as 8,000, factoring in scenarios where foreign capital flows in due to the expected appreciation of the won against the dollar after the war. If the government’s value-up policy and amendments to the Commercial Act are implemented in tandem and the playing field is leveled, the interest of high-net-worth individuals in stocks will grow even further," he concluded.

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