Hantu Securities "August KOSPI 3000~3250... Need to Selectively Invest in Individual Stocks"

[Financial News] Korea Investment & Securities suggested the expected KOSPI band for August as 3000~3250, diagnosing that it is a time when selective response centered on individual stocks is needed.
Korea Investment & Securities Kim Dae-jun, a researcher, stated on the 4th, "The KOSPI upward trend may stop." The band presented this time corresponds to a 12-month forward price-earnings ratio (PER) of 10.0~10.8 times and a 12-month trailing price-to-book ratio (PBR) of 1.01~1.09 times.
Researcher Kim cited the slowdown in valuation expansion as the background for the weakening index upward momentum. He explained, "The market has so far judged that the improvement of the stock market system is linked to the resolution of Korea discount concerns," and "the expansion of PER and the rise of the index were the results of optimism, but questions about the material have arisen, weakening the direction."
It is analyzed that the stock market atmosphere has changed in the 3rd and 4th quarters of this year compared to the 2nd quarter. In particular, after the tax reform plan was announced on the 31st of last month, the incentive for companies to expand their dividend payout ratio has weakened, which is also analyzed as a background for the reduced momentum for PER upward adjustment. Along with this, the rise in US interest rates and the rise in the won/dollar exchange rate are also risk factors.
Researcher Kim analyzed, "Interest rate volatility may increase according to the US Treasury's bond issuance plan and supply-demand changes," and "the Treasury's decision to significantly increase bond supply in the 3rd and 4th quarters is a pressure factor for interest rate rise."
Concerns about the weak won were also raised. He said, "Due to the slowdown in Korea's growth rate, there may be pressure for the won to weaken, so caution is needed," and "the weak won can also adversely affect stock market supply-demand and sector strategy."
Therefore, Researcher Kim suggested focusing on export stocks that had a large drop due to the easing of tariff uncertainties. He also advised selecting sectors with solid performance regardless of the macro environment and high-dividend stocks that fit the tax reform plan.
Researcher Kim emphasized, "As it has become difficult to expect a strong trend across the sectors for the time being, a tactical approach centered on individual stocks is necessary."

elikim@fnnews.com Kim Mi-hee Reporter