"Only Upward Moves Left?"... Samsung Electronics and SK hynix 'margin trading' balances rise by more than 300 billion won

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[Financial News] As expectations grow for a ceasefire deal, market forecasts that the KOSPI Composite Index will rise again are gaining traction, and margin trading in semiconductor stocks such as Samsung Electronics Co., Ltd. and SK hynix Inc. has increased.
According to Yonhap Infomax and the Korea Financial Investment Association (KOFIA) on the 20th, Samsung Electronics Co., Ltd., the KOSPI market leader, had 343.89 billion won in credit trading loans outstanding as of the 16th. That was up 7.6% from 319.63 billion won at the end of last month, when the war between the United States of America, Israel and Iran was at its height.
Over the same period, SK hynix Inc.'s margin balance rose 2.7% from 217.27 billion won to 223.05 billion won.
An increase in credit trading loan balances means that leveraged investments made in anticipation of future stock price gains have risen.
Samsung Electronics' increase stands out even more, considering that margin balances in the KOSPI Market rose about 3.8% this month, from 22.5597 trillion won to 23.4259 trillion won.
As brokerage houses have been issuing forecasts that the KOSPI Composite Index will resume its upward trend amid growing hopes for a ceasefire agreement between the United States and Iran, investor sentiment toward these semiconductor stocks, which led the rally earlier this year, appears to have improved sharply.
Analysts also say sentiment was lifted by expectations that both companies would post record first-quarter results.
In fact, Samsung Electronics posted a surprise first-quarter operating profit estimate of 57.2 trillion won, and SK hynix is also expected to announce a surprise earnings report this week.
Driven by those earnings expectations, Samsung Electronics shares have risen 30.1% this month, while SK hynix has gained 43.1%.
Both figures are higher than the KOSPI Composite Index's 23.2% gain.
Kim Woon-ho, a researcher at IBK Securities Co., Ltd., said, "SK hynix's first-quarter sales are expected to reach 49.877 trillion won, up 51.9% from the fourth quarter of last year, marking an all-time high." He added, "The memory market is expected to grow this year as well, led by AI, and SK hynix is likely to deliver differentiated results in DRAM and NAND flash memory."
He added, "We expect this trend to continue for quite some time," and said, "The stock is undervalued relative to its earnings, and there is still plenty of room for further gains."
However, some also warn that investors should be cautious about margin trading, as volatility could rise again ahead of ceasefire talks between the United States and Iran.
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moon@fnnews.com Moon Young-jin Reporter