SKT AIDC Struggles... August Stock Market Favorable

It has been pointed out that SK Telecom's AI data center business is difficult to pursue with its existing corporate culture and human resources. The AI data center business is completely different in nature and method from the existing telecommunications business, so it is analyzed that successful business promotion will be difficult with the current organizational structure and personnel.

Expert Yoo Chang-hee stated, "Can it be done with the existing framework and structure? I think it's impossible," diagnosing that it will be difficult to expect business performance without fundamental changes.

Following SK Innovation's announcement of its merger with SK On, a sharp drop in stock prices occurred in the market, facing strong opposition from shareholders. Investors had anticipated the secondary battery business to turn profitable by the end of this year or next year, but the integration of SK On, a loss-making business unit, means they will have to endure long-term losses, which is cited as a major reason for their dissatisfaction.

Expert Yoo Chang-hee said, "I think it's natural for it to fall. Because from the shareholders' perspective, there was an expectation that the secondary battery business segment would finally turn profitable by the end of this year or next year, but now that SK On is being pulled back in, meaning they have to continue carrying losses, shareholders are angry," representing the shareholders' position.

Although market anxiety heightened recently with two consecutive interest rate hikes, fears of additional rate increases have eased as the US Federal Reserve's (Fed) dot plot confirmed a majority clustered around the 3.25% level. The market analysis suggests that this has created a sentiment that the hiking cycle will end after one more rate increase.

Expert Yoo Chang-hee stated, "The fact that the dot plot was clustered at 3.25% seems to have created a sentiment that one more hike would be the end," explaining the change in market participants' sentiment.

One of the main reasons the won/dollar exchange rate recently fell below 1,300 won is the weakening dollar index. In addition to corporate selling pressure since July, the dollar index's decline from 101 to 98 has significantly impacted the won's strength.

Bank of Korea Governor Rhee Chang-yong mentioned the possibility of the won strengthening to the early 1,300 won level, suggesting that this trend could continue for some time. This is interpreted as a factor that could positively affect the domestic stock market.

The August stock market environment has shown continuous improvement and favorable changes. After early August, the market has undergone a process of distinguishing between good and bad assets beyond a technical rebound, gradually stabilizing. Experts diagnosed that the market's strength to overcome intraday declines and maintain an upward trend is still alive.

Expert Yoo Chang-hee stated, "I believe that the second, third, and fourth weeks of August were better than the first week, and not a single thing worsened," emphasizing the positive market trend. This implies that the overall market strength is increasing rather than investors flocking to specific themes.

News has been reported that a plan is underway to exempt the previously required reporting procedures for installing Energy Storage Systems (ESS) in domestic buildings. This could bring positive changes to domestic policies related to energy storage devices, raising expectations for the growth of the ESS-related industry.

Expert Yoo Chang-hee mentioned, "There was also news that they plan to exempt the reporting that was previously required when installing ESS in domestic buildings," suggesting that such policy changes could be favorable for related companies.

Construction stocks are drawing attention as investment alternatives in various fields such as nuclear power, redevelopment, reconstruction, and data center projects. This is because an increasing number of construction companies are pursuing energy infrastructure and new technology-related projects in addition to simple housing construction.

In particular, nuclear power-related stocks like Doosan Enerbility and KEPCO Engineering & Construction, as well as traditional large construction companies such as GS E&C, Daewoo E&C, and Hyundai E&C, are receiving positive evaluations for securing growth engines through new business expansion.

Expert Yoo Chang-hee stated, "I also think construction stocks can be good investment alternatives. Construction stocks can be involved in various ancillary projects," emphasizing the investment appeal of construction stocks.

After September, the contours of leading themes in the market are expected to become clearer. Currently, various themes are circulating to drive the market, but in September, there is a possibility that specific themes will strongly lead the market, or the existing rotation trend will strengthen.

Expert Yoo Chang-hee predicted, "In September, that outline will emerge. It will start like this and then show a strong pulling trend later," emphasizing that investors should pay attention to the upcoming changes.

At the upcoming Jackson Hole meeting, there is likely to be greater interest in the Treasury Department's fiscal policy coordination than in the Federal Reserve's (Fed) monetary policy. Market experts downplay the importance of former Fed Governor Kevin Warsh's remarks, analyzing that the key focal point will instead be whether the Fed emphasizes policy coordination with the Treasury or asserts its independence.

Expert Yoo Chang-hee emphasized, "There is a higher possibility of being more influenced by the Treasury's fiscal policy than the Fed. Interest is also gathering on whether it will emphasize policy coordination with the Treasury or assert the Fed's independence," drawing attention to the impact of the relationship between policy authorities on the future market.