KOSPI Rebounds Even With Everyone Selling? Thanks to 'Other Corporations'

On September 1st, the KOSPI market showed an unusual pattern where all three main entities—individuals, foreigners, and institutions—were net sellers. Typically, at least one of these three maintains buying momentum to support the market's downside, but on this day, all engaged in selling, resulting in negative net sales.

However, KOSPI closed with a slight rebound, which was attributed to the buying momentum from 'other corporations'. These corporations supported the market's downside, allowing KOSPI to rebound without further decline.

The current market is in an extreme 'trading cliff' state due to a sharp decline in trading volume. Today, KOSPI's trading volume fell below KRW 20 trillion, and KOSDAQ's recorded approximately KRW 4.5 trillion.

The combined total for both markets barely exceeded KRW 20 trillion, which signifies that market liquidity has completely dried up.

The buying momentum from 'other corporations' is effectively analyzed as share buybacks by Samsung Electronics and SK Hynix. Without their share buybacks, trading by other investor types would have been more active.

Currently, the market lacks the impetus for a rebound, and without these share buybacks, the market would likely have fallen much more sharply. As a result, the market appears to be stuck in a box range, continuing its stagnant state.

This buying momentum from 'other corporations' acts as the sole factor supporting the market's downside, playing a crucial role amid overall sluggish trading.

It is historically unprecedented for Samsung Electronics and SK Hynix, the two largest domestic large-cap stocks, to simultaneously engage in share buybacks. While individual companies have bought back shares in the past, such large-scale simultaneous buybacks by two market-leading companies are without precedent.

These simultaneous share buybacks technically play a crucial role in supporting the market's downside, acting as a buffer against further market decline amidst current liquidity shortages and weakened investment sentiment.

Citi Securities has downgraded its target price for Samsung Electronics. This is primarily due to a slight reduction in Samsung Electronics' third-quarter earnings forecast.

The main reason cited was the impact of exchange rate fluctuations, which is analyzed to have contributed to a decrease in operating profit.

Mass production of HBM4 and subsequent generations of high-bandwidth memory (HBM) is expected around 2027 to 2028. If HBM production significantly increases during this period, there is a possibility that the supply and demand for general DRAM will also achieve balance.

Currently, HBM production involves converting existing general DRAM production lines, so an increase in HBM production could lead to a decrease in general DRAM supply. However, analysis suggests that with overall DRAM market growth and HBM production technology stabilization, supply and demand balance could be achieved in the long term.

Nevertheless, the technical difficulty of the base die (logic die), a core technology in HBM production, is expected to be a significant variable for both large-scale HBM production and the balance of general DRAM supply and demand. The successful securing of this technology will determine the future direction of the entire DRAM market.

If the phenomenon of 'de-spec' (lowering HBM specifications) is prolonged, there is a prospect that the current HBM shortage could ease. Lowering specifications can increase production efficiency and expand supply.

However, the key to mass production of HBM lies in reliably securing base die technology. Since this technical difficulty remains high, it is uncertain whether de-spec alone will fully resolve the shortage. There are still questions in the market regarding the long-term effects of de-spec, and it is premature to draw conclusions about its impact.

Despite the market being in backwardation yesterday, futures buying entered, improving the basis. Futures prices closed slightly higher than KOSPI 200 futures, recording 0.60.

This suggests that foreign investors are taking limited downside bets in the futures market. However, for a sustained rise in KOSPI, buying momentum in the spot market needs to provide support.

Market attention is focused on Broadcom's earnings release scheduled for Thursday morning (local time). Broadcom's financial results and future guidance are expected to be significant market variables.

In particular, investors are watching whether Broadcom's growth can have as much market impact as NVIDIA's growth rate.

Broadcom holds an important position in supplying chipsets related to data centers and artificial intelligence (AI), so its earnings will serve as a key indicator for the overall semiconductor industry trend.

The current market is struggling to find clear upward momentum. A sharp decline in the real estate market could negatively impact the entire market, leading to a decrease in asset values and dampening investment sentiment.

While a 'money move' phenomenon, where funds shift, often occurs during price declines, it is not a positive sign as it accompanies asset value losses. Market experts anticipate that the current lack of momentum will persist, and the market's direction will only become clear after mid-September.

Until then, the market is likely to show volatility amidst uncertainty, requiring investors to approach it cautiously.

POSCO International is expected to see a significant jump in performance this year, after 3-4 years. The company, which annually generated approximately KRW 1.1 trillion in profit, is projected to break out of stagnant growth and show a continuous upward trend. This is notable as performance growth is anticipated despite its price-to-book ratio (PBR) being valued at less than 10 times.

In particular, its palm plantations located in Southeast Asia have started generating substantial profits, significantly contributing to performance improvement. In the past, these palm plantations incurred losses, but now they are generating profits and positively impacting the company's overall performance.

The profits from these palm plantations are a crucial part of the company's intrinsic performance, separate from LNG resource development issues. Beyond palm plantations, eco-friendly businesses like food resources are also expected to drive performance as future growth engines.

Overall, POSCO International is expected to see improved performance not only in resource development such as LNG but also in various business segments like food resources and palm plantations, drawing increasing attention to its future stock price movements.

Despite recent positive trends in export data for cosmetic stocks, the prices of related cosmetic stocks did not show explosive growth today and instead experienced a decline.

This is analyzed to be due to investors taking profits after the cosmetic sector saw a short-term surge in July and August. Additionally, export data typically acts as a lagging indicator, so its direct impact on stock prices may be limited.

During periods of rising interest rates, bond valuations generally decline, which can negatively affect the financial sector. However, insurance stocks may actually see improved profits during such periods.

This is because the duration of insurance liabilities (the weighted average period until maturity of assets and liabilities) is longer than that of bonds. Therefore, when interest rates rise, the value of insurance liabilities can decrease more significantly than the decline in bond valuations. Consequently, experts explain that this can lead to an improvement in profits due to the reduction in liability value.

Over the past month, the domestic KOSPI index rose by approximately 3.4%, outperforming the S&P 500 index's gain of 2.62% during the same period. While the numerical returns for the domestic market were higher, domestic investors tend to express that they have experienced unusually greater psychological distress.

This is attributed to the concern that overseas investment returns may actually decrease when considering exchange rate volatility, and the domestic market makes it easy for investors to react to real-time market situations, causing greater psychological suffering. Investors are prone to stress while constantly observing the fluctuating domestic market conditions.

Conversely, for overseas investments, some argue that limited access and information acquisition can lead to less market monitoring, thus reducing psychological burden. However, the domestic market offers good accessibility and abundant information, making investors more sensitive to minor fluctuations.

Therefore, even with numerically higher returns, domestic market investors tend to experience greater psychological burden, which continuously affects domestic market investment sentiment.

The United States is currently assessed as having neither the intention nor the ability to reduce its national debt. Consequently, the U.S. has identified accelerating GDP growth through artificial intelligence (AI) as the sole solution to its debt problem.

This is interpreted as a strategy not simply to reduce the size of the debt, but to enlarge the GDP pie to relatively lower the debt ratio.

Some hawkish experts argue that for the U.S. to resolve its current debt issues, sustained economic growth of over 4% would be necessary.

As foreign demand for U.S. Treasury bonds reaches its limits, the U.S. government is exploring ways to secure a broader base of demand for its debt. Analysis suggests that the absorption of Treasury bonds by domestic banks and insurance companies has also reached its limits.

Consequently, there is speculation that the U.S. government might induce domestic investors to sell other assets to purchase Treasury bonds, possibly through tax reforms.