Market Rises Despite Oil and Interest Rate Hikes

This is a proactive measure to relieve the burden of excessive credit leverage and prepare for market volatility.

A reduction in portfolio weight due to health reasons also influenced this decision, which is interpreted as an intention to manage the risk of his personal portfolio and create a stable investment environment.

Despite reducing leveraged positions, CEO Yoo Chang-hee maintained a positive outlook on his core holdings such as Samsung Electronics and SK Hynix. He stated that if a short-term price correction occurs in these stocks, he intends to increase his holdings through additional purchases.

This strategy demonstrates CEO Yoo's investment philosophy of managing his existing investment weight, which was as high as 200%, to an appropriate level while maintaining expectations for the intrinsic value growth of the companies.

He expects a stair-step increase with short-term fluctuations.

He emphasized the significance of reaching a market capitalization of $1 trillion due to exchange rate changes, expressing confidence in SK Hynix's growth potential.

This target price appears to reflect expectations for an improvement in the semiconductor industry ahead of the October earnings announcement.

CEO Yoo Chang-hee predicted that if WTI crude oil prices reach $98, market contraction would begin, and if they approach $100, a short-term shock could occur. He also believes that if 10-year Treasury yields exceed 4.8%, it will inevitably impact the market.

He expects such short-term adjustments to last no longer than about a week, recommending response strategies such as using them as buying opportunities or adjusting cash holdings.

He emphasized that temporary market declines should be viewed as opportunities for long-term low-price purchases.

CEO Yoo Chang-hee stated that existing oil-related news can be regarded as a short-term market shock and responded to accordingly. However, he warned that if exceptional negative factors such as former President Trump's military remarks emerge, market reactions and investment strategies could change.

This suggests that existing short-term adjustment strategies may be insufficient when unexpected geopolitical risks or political uncertainties arise.

He analyzed that the current market noise from rising oil prices is likely to offset the positive effects of buybacks.

However, he believes volatility is likely to increase 2-3 days before the expiry date.

He analyzed that since the futures expiry date is included in the simultaneous expiry, market movements could intensify during the period when position adjustments are concentrated.

Investors need to be cautious about increased volatility just before the expiry date and plan their strategies accordingly.

CEO Yoo Chang-hee set the Kospi target for September at 2,750 points. He stated that if this target is reached, he will reduce his stock holdings to around 30%.

He plans to re-expand his holdings through a re-purchase strategy when the market declines thereafter.

He viewed this as a positive sign that enhances market soundness.

He diagnosed that the market's supply and demand balance is being met as foreigners, institutions, and other corporations absorb the volume sold by individual investors.

He expressed hope that distressed assets formed in July could be resolved through these individual sales.

CEO Yoo Chang-hee believes the semiconductor market has moved beyond a short-term rebound into a trend-driven upward phase. He mentioned that the semiconductor turnaround already occurred on Monday and expects a positive trend until the end of October.

He judged that semiconductor stocks are undergoing a process of absorbing selling pressure and turning upwards, which will act as a crucial trigger for the overall market's rise.

He particularly emphasized that this week is presenting opportunities for semiconductors to continue leading the market's ascent.

CEO Yoo Chang-hee believes that if large-scale nuclear power plant construction projects in the U.S. fully commence, domestic equipment manufacturers will significantly benefit. He mentioned the possibility of acquiring a stake when Westinghouse goes public (IPO), highly rating the potential participation of Korean companies.

He expressed anticipation that the U.S.'s first investment in the U.S. has been confirmed for nuclear power and gas power plants, and most of the related equipment would be Korean products.

He assessed that practical issues such as construction licenses are likely to be resolved.

CEO Yoo Chang-hee analyzed that some of the battery sector's supply and demand is shifting towards fuel cells, emphasizing the need to pay attention to this sector. He specifically mentioned that Bloom Energy's inclusion in the S&P 500 is expected to attract capital inflow, and Doosan Fuel Cell tends to move in conjunction with Bloom Energy's stock price.

He noted that the value of hydrogen fuel cells as a power source for data centers is gaining prominence, leading to growth in the related market.

Accordingly, he suggested the possibility of a co-rise for domestic hydrogen fuel cell-related stocks such as Doosan Fuel Cell and Vinatech.

He projected that as the role of hydrogen fuel cells increases in large-scale power consumption sites like data centers, the growth potential of related companies will also expand.

According to the 20% rule applied to semiconductor ETFs, portfolio adjustments are expected to lead to estimated sales of approximately 1.1 trillion won for SK Hynix and 200 billion won for Samsung Electronics.

However, he anticipated that this supply and demand is a temporary phenomenon, and the sold funds will move to materials, parts, and equipment (Soo-Boo-Jang) stocks.

Therefore, he viewed the negative impact of semiconductor ETF rebalancing on the market as not significant and expected it to proceed gradually.

He viewed this as a transaction between major shareholders, eliminating concerns about an overhang (excess supply) in the market.

CEO Yoo interpreted this share consolidation among major shareholders as not having a negative impact on the market, but rather as a positive signal for establishing a stable governance structure.

From the market's perspective, it is important that major shareholder equity consolidation does not immediately lead to selling pressure.

CEO Yoo Chang-hee placed more weight on the likelihood of continued battery-related regulations rather than expectations for a U.S.-China summit. Despite this, he observed that the energy storage system (ESS) market, including data centers and battery backup units (BBUs), is entering a phase of full-fledged growth.

He emphasized that a response strategy focused on the Samsung SDI value chain remains effective for key stocks in the ESS market.

CEO Yoo Chang-hee believes that while shipbuilding stocks have healthy order backlogs and performance, they currently lack the momentum to actively drive stock prices. Therefore, he judged that active buying of shipbuilding stocks is not attractive at this time.

However, he offered the opinion that specific stocks like Hana Engine could see their market grow through self-generation and can be viewed positively in the long run.