KOSPI Rebounds Despite Heavy Foreign Selling; Semiconductor Leaders in Focus

Even as foreign investors continued heavy stock selling recently, domestic share prices were seen rebounding. This is because program buying using stock futures acted as a driver of the market rally. The domestic market has a structural characteristic of concentrating on derivatives, and moves in the futures market tend to have a direct impact on large-cap stocks such as Samsung Electronics and SK Hynix.

It was pointed out that there is no set answer for the relationship between exchange rates and supply-demand flows, and that placing too much faith in supply-demand data does not help investing. Individual investors can find themselves under severe psychological strain if they overreact to short-term changes in supply and demand. Market participants who fit logic to supply-demand data after the fact also drew criticism.

Samsung Electronics and SK Hynix announced share buybacks exceeding 1 trillion won. However, foreign investors continued selling for two to three trading days after the announcement. This suggests that mechanical flows are operating at a level that does not cause price distortion. Share buybacks have not led to a short-term surge in prices, and foreign selling has persisted.

It was argued that current foreign selling is excessive relative to fundamental value. Foreign investors have tended to buy the domestic market when the macro environment is stable. Easing geopolitical risks, such as improving relations between Trump and Iran, falling oil prices, and stable treasury yields, are expected to be key to a resumption of foreign buying.

Shareholder return policies aimed at resolving undervaluation of companies are being implemented. However, despite these policy announcements, share prices remain within their existing trading range. Skepticism is growing about the effectiveness of shareholder return policies as a catalyst for share price gains. Because the policy announcements have not translated into actual price increases, they have fallen short of investor expectations.

Related companies such as Google's TPU (Tensor Processing Unit), Broadcom, and Marvell are expected to lead market expansion and drive HBM demand.

The ABF (Ajinomoto Build-up Film) substrate market is expected to remain oversupplied through 2025. However, supply shortages are forecast to intensify between 2027 and 2028. Currently, the share of the market that has shifted to shortage stands at about 8%. This shift in supply and demand could affect the semiconductor industry as a whole.

This means substrate stock movements anticipate the overall direction of the semiconductor industry. A decline in substrate stocks can be read as a signal that the semiconductor market has peaked. For this reason, it is important to watch developments in the substrate market.

In today's market advance, parts and materials stocks, particularly substrate-related shares, showed strength. This suggests that parts and materials companies could lead the market going forward.

Advice was offered to avoid aggressive investment in nuclear power stocks and to focus on sectors that have not yet risen. Shipbuilding, defense, and power equipment-related sectors were mentioned as promising rotation targets. Growing power shortages are expected to fuel growth in the power equipment industry.

Lectures and seminars are planned in which individual investors' actual accounts will be analyzed and counseled directly. This should help investors objectively assess their account status and build tailored investment strategies.