Foreign Investor-led Bull Market for Large-Cap Semiconductors Just Beginning... KOSPI Below 6,000-7,000 pts is an Opportunity to Accumulate Leading Stocks

While Moderna's cancer vaccine development is real, analysis suggests that vague expectations of Korean biopharmaceutical stocks benefiting from Moderna are excessive. There is still a technological gap between Korean companies and large US pharmaceutical firms, and short-term surges due to already-exposed news should be viewed with caution.

It's a big misconception to think that Korean biopharmaceutical stocks will surge as if they are direct beneficiaries of Moderna.

The current market is experiencing extreme concentration on Samsung Electronics and SK Hynix. Samsung Electronics surged 9% and SK Hynix 13%, leading the market, while other large-cap stocks showed mixed performance, mostly trading flat to slightly up, indicating relative underperformance. Although the overall index rose, the market sentiment does not match the extent of the index's increase.

"Today, only Samsung Electronics and Hynix surged significantly. Samsung Electronics rose 9%, and Hynix jumped 13%. While other stocks also rebounded, other stock groups generally recorded mixed patterns, showing strength and weakness, to the extent that the overall index rose quite a bit, but it's not a particularly good market in terms of sentiment."

The core leading sector in the current market is undoubtedly semiconductors, with a high probability of a bull market driven specifically by large-cap semiconductor stocks. Investors should concentrate on sectors with certain upside rather than diversifying across many stocks. Meanwhile, preparing for the emergence of emerging leading stocks is important, but for now, due to supply and demand concentration, other stocks may face selling pressure.

"Even as I tell you that the market's core leader is semiconductors and that we're preparing for the emergence of emerging leaders, a market where only large-cap semiconductor stocks rise could unfold. That's the key point."

Foreign capital, which saw 4 trillion won in selling yesterday, turned to 2.3 trillion won in buying today, showing signs of recovery. However, foreign capital is likely to continue flowing in 'gradually' rather than aggressively, with a steady but incremental buying trend expected. Thus, a full-fledged foreign investor-led market will take time, making it more challenging for individual investors to respond.

"You can see that foreign investors' supply and demand are recovering. There's a high probability that foreign buying will continue to come in, but it won't be a huge surge like you might expect. It will come in gradually. That's why this market is difficult."

Many stocks of interest in the market are merely experiencing temporary rotational rebounds. Therefore, investors must clearly distinguish between leading stocks that will drive market gains and those undergoing temporary short-term rotational rebounds. In the current market, Samsung Electronics and SK Hynix are expected to play key leading roles in driving market increases.

"There are so many stocks of interest, but there isn't a single one I haven't looked at or excluded. Every time they rise, I analyze why the stock price is going up, determine if it can go higher, and yet, what's the conclusion? It's just a simple, temporary rotational rebound."

The current market has entered the early stages of a bull market where foreign investors are the dominant force and large-cap semiconductor stocks are the key leaders. In a bull market, a strategy of investing primarily in leading stocks is crucial, and it's clear that individual investors focusing on short-term trading will face limitations. This is a situation where the market has just resumed its ascent after a pause, with clear leading forces and leading stocks.

"This is a bull market now. And it's a situation that has just started to re-ascend after a pause. The bull market has entered its early stage. Currently, there are clearly leading forces; it's a market with leading forces and leading stocks."

The US administration is expected to continue implementing policies to suppress rising bond yields due to increasing fiscal burden. The US Treasury is taking active measures such as repurchasing bonds through buybacks. Given the US debt size of approximately 40 trillion dollars, concerns about rising bond yields are not significant.

"The US administration will continue to implement policies to suppress rising bond yields. So, there are no concerns about rising interest rates. We shouldn't worry about it anymore."

SK Hynix has implemented a shareholder return policy exceeding 40 trillion won, and Samsung Electronics is also preparing a policy of over 100 trillion won. For currently undervalued large-cap semiconductor stocks, large-scale shareholder returns will act as powerful positive catalysts. In particular, share buybacks and cancellations are expected to significantly contribute to securing price stability and improving investor sentiment.

"SK Hynix 40 trillion won plus alpha, Samsung Electronics 100 trillion won plus alpha. Shareholder return policies are now being prepared. Samsung Electronics and Hynix have discussed such plans, and since Hynix has implemented theirs, Samsung Electronics is also clearly in a situation where it has to do the same."

Customer deposits, which had fallen below 100 trillion won, have recovered to 104 trillion won. This indicates an improvement in market liquidity. As surrounding conditions further improve and foreign buying continues to flow in, pushing up the index, aggressive market participation by individual investors is expected to follow.

"Customer deposits recovering to 104 trillion won, market resilience and individual inflow expected."

The current KOSPI index below 6,000 to 7,000 points is not merely a time to grow accounts, but a period for concentrated accumulation of core leading stocks and potential emerging leading stocks. This is an opportunity to significantly boost accounts at once, and a two-track strategy should be employed to prepare for both core leading and emerging leading stocks.

"This is a period below KOSPI 6,000 or 7,000 points, where you intensively accumulate core leading stocks and emerging leading stocks to really make your account explode at once."

The sectors to target should be narrowed down to semiconductors, securities, secondary batteries, and physical AI. Conversely, banking, biopharmaceuticals, cosmetics, steel, and chemicals are considered sectors to exclude from the current market. Even for stocks benefiting from data centers, it is advisable to exclude those expected to have limited profit margins from investment consideration.

"We've further compressed the sectors to semiconductors, securities, secondary batteries, and physical AI."

Semiconductor stocks are clearly emphasized as the core leading stocks in the current market. Key reasons include their absolute undervaluation and sustained high growth potential. Furthermore, Samsung Electronics' and SK Hynix's large-scale shareholder return policies are expected to contribute to securing price stability. Their importance is further magnified by accounting for over 50% of the total market capitalization and playing a role in driving the index.

"Semiconductors are clearly emphasized, but we must watch them because they are the core leading stocks of the current market."

Securities stocks are gaining attention as the best-performing and most undervalued sector among financial stocks. Rather than Q3 earnings, expectations for Q4 earnings are likely to re-emerge as the stock market recovers. Therefore, securities stocks are highly likely to move in the future, and it is advantageous to enter after confirming an aggressive inflow of capital.

"What's important is not the Q3 earnings, but the expectation for Q4 earnings will re-emerge later if the stock market revives. And that makes them very likely to move."

Conditions are certainly being created for secondary battery stocks to move, but an immediate surge seems unlikely. This is because even cathode material-related stocks, despite good performance, have seen limited upward movement. However, foreign capital is steadily flowing in at bottom levels, which can be seen as a positive sign from a long-term perspective.

"Conditions are certainly being created for secondary battery stocks to move. But it will be difficult for secondary battery stocks to surge individually right now, given that even stocks with good performance aren't moving."

Despite defensive outlooks from brokerage reports, analysis suggests that Samsung Electronics and SK Hynix are highly likely to break their previous highs. If the growth of the artificial intelligence (AI) and semiconductor markets is confirmed once again, these stocks are projected to experience another strong price surge. Technological innovation and market growth will be powerful drivers of stock price increases.

"I believe there's a very high possibility they will break their previous highs. If the growth of the AI and semiconductor markets is confirmed once again, the price surge will be strong again."

In the current market, rather than frantic short-term trading, a mid-term approach focusing on leading stocks is necessary. To achieve this, a dual strategy of operating general and long-term accounts is proposed. The general account should be used for short-term trading, while the long-term account should focus on ETFs, blue-chip stocks, large-cap stocks, and performance stocks—excluding speculative ones—with a long-term perspective of at least 6 months, typically 1 to 2 years, without being swayed by short-term volatility. By managing these two accounts concurrently, both stability and profitability can be secured.

"Right now, you shouldn't be engaging in frantic, back-and-forth trading. You need to focus on a mid-term strategy, making your move with leading stocks. As I mentioned, I'm currently trading with two accounts: a general account and a long-term account. The long-term account doesn't deal with speculative stocks; it focuses on ETFs, blue-chip stocks, large-cap stocks, and performance stocks that have just broken out of their lows, held for at least 6 months, typically 1 to 2 years, from a long-term perspective, without being affected by short-term volatility. That's how that account is managed."