September Stock Market: Intensified Sector-Specific Trading Expected

Park Byeong-chang, CEO of MP Partners, predicted that the September stock market would see fluctuations based on timing rather than continuous declines or rises. He analyzed that the decoupling phenomenon with the US market is weakening, and the domestic stock market will move based on internal issues and supply and demand.

CEO Park Byeong-chang explained that as semiconductors have somewhat stalled, secondary batteries are emerging as an alternative in the market, attracting supply and demand. He added that stocks like Samsung SDI and L&F are showing pre-emptive gains, indicating a trend where the upward momentum spreads to other sectors even as the leading stocks maintain strength.

The September stock market is expected to see a deepening of sector-specific trading. CEO Park Byeong-chang advised that in such a market, passive investors should observe, while active investors should focus on the return game. He predicted that there would be a stronger continuity in rising stocks.

CEO Park Byeong-chang stated that while he maintains his existing forecast of interest rates remaining frozen, recent remarks from the Fed necessitate preparation for a 30% possibility of an interest rate hike. He believes it is necessary to establish a response strategy tailored to this 30% possibility to manage risks.

The recent stock market has seen an unusual situation where individual investors net sold 200 billion won, foreigners 460 billion won, and institutions over 870 billion won. CEO Park Byeong-chang analyzed that a stock price rebound despite net selling from all three groups is very rare, and a deeper interpretation of the cause of this rebound is needed.

CEO Park Byeong-chang emphasized that investors must be able to distinguish between aggressive buying, conservative buying, aggressive selling, and conservative selling strategies. Aggressive buying indicates a willingness to buy immediately, even at a higher price, while conservative selling involves placing an order at a target price and waiting. It is crucial to accurately grasp the nature of real-time supply and demand reflected in the order book.

With the U.S. national debt surpassing $40 trillion, the U.S. Treasury Secretary stated that the strategy should be to rapidly grow the economy to reduce the debt burden relative to GDP, rather than immediately cutting the debt itself. This is based on the expectation that AI infrastructure investment will lead to productivity improvements and drive economic growth.

CEO Park Byeong-chang analyzed that while AI infrastructure construction may expand capital and power demand in the short term, it can alleviate inflationary pressure in the long term by increasing productivity. The advancement of AI technology is expected to be a key to reducing unit costs and, in turn, overall upward pressure on prices. Ultimately, AI growth could lead to disinflation.

CEO Park Byeong-chang predicted that the August export and import trends, to be announced today, will be a key variable for the September sector-specific market. In particular, sectors or stocks that showed a significant increase in August exports compared to the previous month are likely to show strong movement in today's market. However, caution is advised for strategies involving pre-purchasing before such announcements and selling at the time of the announcement.

U.S. sanctions against China are leading to increased demand for power infrastructure and batteries, raising the possibility of a rebound for secondary battery-related stocks. CEO Park Byeong-chang cited Samsung SDI's recent signing of a roughly 3 trillion won LFP battery supply contract with Sungrow, the world's leading company. He analyzed that the secondary battery sector, which experienced a significant stock price decline from its 2023 peak, could see a rebound momentum if Democrats gain an advantage.

LS Securities recently published a report downgrading SK Hynix's target price while simultaneously upgrading Samsung Electronics' target price. Eugene Investment & Securities also advised diversifying investments into various fields such as shipbuilding, secondary batteries, and bio in the second half of the year. The downgrade of SK Hynix's target price is analyzed to be due to concerns about intensified HBM competition and diversified supply.

According to TrendForce data, Samsung Electronics has already allocated approximately 70% of its memory production capacity through long-term supply contracts with major customers such as Nvidia, Microsoft, and Google until 2031. This signifies a shift towards a stable revenue structure for Samsung Electronics, with stability strengthening rather than growth. Therefore, a buying perspective during stock price declines may still be valid.

Regarding the common adage 'buy when it falls,' CEO Park Byeong-chang emphasized that it should be applied differently depending on the trend. He explained that it is appropriate to buy during an uptrend even if the price temporarily declines for a day or two. However, it can be risky to unconditionally buy when the stock price has already entered a downtrend or is at its bottom. The buying criteria should be determined by closely analyzing market conditions and stock price trends.