Middle East Risk and US Investment Rotation…Where To?

Former President Trump has a precedent of trying to lower oil prices when government bond yields surged, so the market expects a similar development this time as well. It is interpreted that Trump is inducing Iran to raise the level of escalation while pretending to be dragged along.

This strategic move implies the possibility that Middle East risks will rapidly subside in September or October. The market has already learned Trump's intentions, and his remarks can be interpreted in this context. This is expected to act as a major variable affecting international oil prices and related markets going forward.

This rise in food prices leads to overall inflation and increases market instability.

In particular, combined with winter agricultural supply restrictions, the rise in the food index may accelerate further. Global investment banks (IBs) warn that these complex factors could raise overall inflationary pressure.

It is common market knowledge that when energy-related stocks surge, growth sectors such as tech stocks tend to weaken. However, in the recent market, semiconductor and robot-related tech stocks and energy stocks such as Heunggu Oil showed strength at the same time, displaying an unusual coexistence.

Semiconductor materials, parts, and equipment companies such as KCTech and HPSP continued a solid trend. This growth driver is mainly due to the growth of artificial intelligence (AI) agent services such as GPT-6 Astra and Meta Muse.

The outlook that the memory supply shortage will continue until 2027 also supports HPSP's positive outlook.

Major investment institutions such as UBS maintain the view that memory price increases and tight supply-demand conditions will continue in the third quarter. This is expected to have a positive impact on HPSP's sales and profitability. Expert Kim Tae-yun has recommended buying HPSP from the 30,000-40,000 won range, and says buyers at that time would have earned significant profits.

Lowering the number of high-bandwidth memory (HBM) layers increases the number of HBM stacks. This allows more HBM to be produced, leading to an increase in total HBM volume.

The increase in HBM production directly leads to expanded demand for inspection equipment needed for each HBM. Accordingly, inspection equipment companies such as Intekplus are expected to benefit greatly in the HBM4 market.

Due to the KRX semiconductor index rebalancing, about 1.24 trillion won of SK Hynix and about 200 billion won of Samsung Electronics were expected to be sold. Due to this supply-demand burden, SK Hynix showed relatively sluggish performance in the domestic stock market despite the surge in its ADR in the US market.

The funds that flowed out formed a structure of being reallocated to semiconductor materials, parts, and equipment stocks within the same index. As a result, large-cap stocks remained flat, while KOSDAQ materials, parts, and equipment companies showed strength.

Some experts argue that the current rise in the semiconductor materials, parts, and equipment sector may be a 'fake rise' caused by temporary supply-demand inflows from the KRX rebalancing effect. They cite the fact that macro (macroeconomic) burdens such as interest rates and oil prices still remain.

However, there is also a counterargument that the uptrend will continue because big tech companies' willingness to invest in artificial intelligence (AI) remains unchanged. The view is that there are fundamental growth drivers beyond temporary supply-demand effects.

The United States is pressuring South Korea to dispatch troops to the Strait of Hormuz. In response, a scenario is being raised in the market that South Korea could refuse the dispatch but increase investment in the US to soothe US dissatisfaction.

This is not an officially confirmed fact but one interpretation formed in the market. However, if such a scenario materializes, it could have a significant impact on the scale and direction of domestic companies' US investment.

Mid- to long-term investment is not about buying a stock that has already surged late and holding it for a long time. The key to true mid- to long-term investment is to take the lead and hold before the stock price rises, when people are not interested.

Gas combined cycle power generation produces electricity by operating gas turbines and steam turbines together, and in this process, HRSG stands out as core equipment.

Through the acquisition of NEM, Mico strengthened its competitiveness in the gas combined cycle power market and laid the foundation to respond to growing data center power demand. This is expected to act as a mid- to long-term growth driver for Mico.

This is because opposition from residents in both Republican and Democratic areas can be used politically.

However, after the election ends, data center investment is expected to regain speed. There is also a possibility that data center investment will accelerate as part of presidential campaign pledges, which could have a positive impact on related companies.

These companies need to be approached with a long-term perspective rather than selling on short-term market corrections.

In times when the macro (macroeconomic) environment is burdensome, policy beneficiaries are likely to stand out even more. Attention is needed on these stocks, which can directly benefit from US infrastructure investment and energy transition policies.

In particular, it has concrete distribution robot technology proven in the field, giving it a competitive edge in this area.

If the flow of dialogue between the US, Russia, and Ukraine becomes visible, it is highly likely to also stand out as a Ukraine reconstruction theme. Based on these multiple growth drivers, expert Kim Tae-yun says Jinjin Construction Robot is worth using as a buying opportunity when it pulls back.

Generally, nuclear power plant construction requires FID to be confirmed before equipment orders are placed, but this measure takes into account the characteristics of equipment that takes a long time to manufacture.

Thanks to this program, the timing of equipment orders has been moved up, allowing companies such as Doosan Enerbility to have their orders become visible earlier. This speeds up the progress of nuclear power projects and has a positive impact on related companies' earnings improvement.

This is because share buyback volume must also be considered along with rebalancing sell volume.

Expert Kim Tae-yun judges that the positive impact of share buyback volume on stock prices is significant, and believes the rebalancing effect will not have a major impact on these companies' stock prices. Accordingly, he maintains a hold opinion on the two companies.

Ahead of the US presidential election, the release of major economic indicators such as the producer price index (PPI), consumer price index (CPI), and Federal Open Market Committee (FOMC) results, as well as the early November midterm elections, create continued caution in the market. Amid such uncertainty, issues related to US investment are highly likely to continue causing rotation buying.

During this period, investors are expected to react sensitively to changes in US policy direction and economic conditions, and investment in related beneficiary stocks is expected to continue actively.