Foreigners Defend Index Ahead of Futures Expiry

Recently, individual investors recorded a selling spree of 2.7 trillion won in the stock market. In contrast, foreign investors, institutions, and financial investment firms showed net purchases of approximately 2 trillion won. The reason for this large-scale selling by individual investors is not yet clearly understood.

Thursday, September 10, is the futures and options expiry date, and foreign investors' futures positions are currently showing losses. Nevertheless, foreign investors are still maintaining their long bets.

Foreign investors need to maintain the KOSPI index above 7,400 points until the September 10 futures and options expiry date to profit from their long positions. This requires an additional increase of about 7% from the current index level. Due to this, there is a possibility that foreigners will try to drive up the index before the expiry date.

If the KOSPI index rises by 7%, the KOSDAQ index is also expected to rise in conjunction. Considering KOSDAQ's volatility, an additional increase of about 10.5%, higher than the KOSPI's rise, is also possible.

The main reason for the recent dull, range-bound movement of the KOSPI and KOSDAQ indices for the past 1-2 weeks was attributed to the Bank of Korea's benchmark interest rate hike. This is analyzed as a reflection of the market's concerns about interest rate increases.

Analysis of the Bank of Korea's dot plot suggests no further interest rate hikes this year. Accordingly, the recent two-week correction is interpreted as the market pre-reflecting the interest rate hike, and major market risks are considered to have disappeared.

DND Pharmatech stock was newly added for VIP members. The main point of addition is the expectation of a short squeeze, with a 5% allocation purchased and plans for an additional purchase up to 10% if it declines.

Caution was advised regarding a trend upward for biotech stocks. It was analyzed that it is difficult for a stock that has been declining for seven months to fully rebound in just one month. The process of an inverse array stock transitioning to a direct array takes time, and opinions advocating for a short-term trend reversal should be approached with caution. This is likened to the difficulty of significantly improving math scores in a short period.

Three promising biotech stocks based on short interest were recommended: DND Pharmatech, Peptron, and Olum Therapeutics. It was stated that a short squeeze return of at least 20% to 30% can be expected from these stocks.

DND Pharmatech, Peptron, and Olum Therapeutics were selected as biotech short squeeze targets for short-term plays. Alteogen was also positively evaluated, but it was added that it needs to be approached with a longer-term perspective rather than a short-term one.

The rise in 2nd battery stocks was attributed to increased demand for ESS (Energy Storage System) batteries and a JPMorgan report. JPMorgan provided positive outlooks and raised price targets for Samsung SDI and LG Energy Solution. Among these, Samsung SDI was evaluated as being in the best technical position with a perfect direct array on its chart, while EcoPro BM was analyzed as failing to overcome its mid-to-long-term downward trend.

Most 2nd battery stocks are currently considered to have experienced a technical rebound. It was stated that investing in 2nd batteries right now should be approached cautiously, but if one insists on investing, only EcoPro BM is viable. EcoPro BM has about 25-30% additional upside potential to its mid-to-long-term technical rebound target. It is expected that the 2nd battery rebound will conclude once EcoPro BM and EcoPro rise.

After a significant market decline in July, August was evaluated as a matching-game market with technical rebounds. It was analyzed that there was no clear leading sector in August. Concerns were raised that in September and October, there might be no leading sector, and unpredictable risks could arise, causing commodity prices to surge and trouble the domestic stock market. A strategy of betting on a 'soon bus' (inverse 2x) was mentioned in preparation for such a correction period.

Kioxia's new factory is scheduled to start operations in January 2029. Considering that the typical payback period for manufacturing investment is three years, a long-term boom is expected until 2031.

Concerns about AI CapEx (capital expenditure) peaking out were completely refuted. It was explained that revenue growth of over 70% is projected until 2028, proving the continued demand for semiconductors. It was emphasized that theories about a slowdown in hyper-scaler investments are merely political factors and lack realism.

For efficient investment, a method of selecting 1-2 main sectors out of the total 7 sectors and concentrating 70% to 80% of the portfolio in them was proposed. This strategy criticizes the inefficiency of diversified investment and aims to maximize returns through selection and concentration.