Foreign Investors Net-Buy Over 9 Trillion Won in Four Days, Semiconductors and Hyundai Motor Lead the Market

Excluding Monday, foreign investors have kept up multi-trillion-won net buying since Tuesday. Today (the 14th) alone they bought more than 3 trillion won, pushing the four-day cumulative net purchase past 9 trillion won. CEO Kim Dong-yeop explained that this foreign buying is concentrated in semiconductor names such as Samsung Electronics and SK Hynix, strongly driving market supply and demand.

Overnight in the US market, chip-related stocks staged a strong rally. This week, the S&P 500 hit a record high, and big tech companies broadly reported solid earnings. This positive mood in the US market spilled over into the domestic market.

As of this morning (the 14th), the probability of a rate hold in September rose to 65%, and analysts say market uncertainty has diminished.

Auto parts stocks, including Hyundai Motor's peers, were especially strong. After Hyundai Motor announced plans for its robotics business, related stocks rose sharply. With support from the auto sector, Samsung Electronics and SK Hynix, which had paused briefly, helped the index maintain a firm trend.

Over the past three to four days, the KOSDAQ has entered a correction phase after a sharp rise last week. As large caps such as Samsung Electronics and SK Hynix stayed firm, the KOSDAQ's bio sector and others were relatively subdued throughout this week.

The PPI released before the US market opened last night came in below expectations, greatly easing rate-hike fears. This drove further gains in tech stocks, and foreign buying continued this morning, reversing the common expectation that the market would stall after expiration day. Foreign investors maintained steady buying throughout the day and played an important role in supporting the index.

Hyundai Motor was the center of attention today (the 14th). It rose more than 8%, mainly after a scoop yesterday (the 13th) reported that Hyundai had asked its tier-1 suppliers for business plans to develop robot parts rather than auto parts. Hyundai believes that beyond developing humanoids on its own, suppliers must jointly make and supply robot parts to bring the humanoid price, which reaches about $100,000, down to one-tenth of that level.

Last night (the 13th), LG and Nvidia reportedly met to discuss physical AI. About two weeks ago, Samsung created a dedicated robotics team under its DX division. A few days ago, there was also news of a humanoid demonstration by President Yoo Tae-woo, and expectations are growing for a notable showing at next year's CES. Samsung is pushing robotics as a new growth business, Hyundai is demanding that all its parts suppliers make robot components, and LG is strengthening physical AI through its alliance with Nvidia. Today was filled with robotics news.

Yesterday (the 13th), news broke that foreign companies will be allowed to build naval vessels in the US. Although the scale is only about two ships, expectations grew that domestic shipbuilders could win the orders, and shipbuilding stocks were strong today (the 14th).

The AI company Anthropic is reportedly pursuing a listing around October. Its market value, which was around 600 to 700 trillion won at the start of the year, is now estimated at a minimum of $2 trillion (about 2,700 trillion won), and some experts project up to $3 trillion (about 4,000 trillion won) at 30 times revenue. That would be a scale exceeding 4,000 trillion won.

News that LG CNS also invested in Anthropic a few years ago drew attention to both stocks alongside the expected listing.

The market has moved out of its downtrend channel. During the pandemic, a V-shaped rebound occurred, but the prevailing view now is that a V-shaped recovery is unlikely. Instead, a 'root-shaped rebound' is expected, meaning a rebound that could reach higher levels than before the decline. CEO Kim Dong-yeop said that if a root-shaped rebound materializes, the market could show even more striking gains.

While the KOSPI took a breather last week and the KOSDAQ rose sharply, the KOSPI has risen steadily by 150 to 200 points each day from Tuesday through Friday, excluding Monday, reaching 7,000 today (the 14th). CEO Kim Dong-yeop analyzed that since the KOSPI has reached the overbought or oversold threshold, the market now stands at a fork: either it moves further into overbought territory or drops back into oversold territory.

With the rebound led by foreign investors and buying continuing, expectations are growing that the rally could broaden. CEO Kim Dong-yeop noted that many view the market as one that bottomed out after retail investors' panic selling in the mid-5,000s, and that retail investors tended to keep selling once the index passed 5,000. This week, retail selling appears to have matched foreign buying. He expects retail investors to keep selling until around 7,400 to 7,500, but if foreign buying persists and the index is seen breaking past 7,500 toward 8,000, retail investors will re-enter and help push the index to 8,000.

In this rally, the focus is not only on Samsung Electronics and SK Hynix, as ETF-driven concentration is also easing. Morgan Stanley recently changed its top pick among Korean IT stocks from Samsung Electronics to Samsung Electro-Mechanics, a sign that targets are shifting. He expects that besides Samsung Electronics and SK Hynix, mid-to-large caps with room to rise will exist, and the market is likely to advance in a more diversified way.

The outline of shareholder return plans from Samsung Electronics and SK Hynix is expected to emerge around late August. Estimates of the size of shareholder returns vary widely among brokerages: one predicts Samsung Electronics alone will return 700 trillion won over three years, while others see figures in the 100 trillion won range. Today's report suggested that Samsung Electronics and SK Hynix together are likely to announce shareholder return plans totaling around 300 trillion won, combining 200 trillion and 100 trillion won.

Uncertainty is growing that the US may not raise rates even once this year. Even without a major event next week, this could create a general sense that rate hikes will not come quickly across the market. As a result, growth stocks such as biotech could gain opportunities for some time.

CEO Kim Dong-yeop expects the market to keep rising until retail investors start participating actively again. He suggested that once retail investors switch to buying, there may be two to three days of momentum, so selling strategies should be considered above 8,000 points. He believes that pushing the index to 8,000 will again be the role of retail investors.

The most important point in this video is the robotics industry. Recently, a US policy to restrict Chinese-made robots has emerged, and Hyundai Motor is moving to fully transform its business model. Hyundai has instructed its tier-1 vendors to make and supply robot parts. The article notes that about ten tier-1 vendors, including HL Mando, are producing robot components such as actuators, drive motors, and sensor cleaning systems in their respective specialties at reduced cost. This means existing auto parts makers are transforming into robot value chain companies, which is expected to provide strong upward momentum for their stock prices.

The Korean government is fostering seven future growth industries: small modular reactors (SMR), nuclear fusion, renewable energy, quantum computing, aerospace, advanced bio, and advanced materials, parts and equipment. These overlap considerably with the areas discussed above, and the government is providing full-scale policy support. As a result, promising companies in these government-backed fields are expected to grow and generate many catalysts for their stock prices. This policy backing could give these companies a strong tailwind.