As Samsung Electronics and SK Hynix faltered, these stocks shone... "Defensive stocks are a refuge"

[Financial News] Defensive stocks stood out as semiconductor shares weakened. Financial stocks, including banks and brokerages, along with consumer-related stocks, showed strength over the past week and drew attention.
According to the Korea Exchange on the 5th, financial stocks posted the biggest gains among KRX indices over the past week (June 29 to July 3). The KRX Bank Index rose 13.71% from 1,436.35 to 1,633.25, marking the sharpest increase among KRX indices during the period. The KRX Securities Index also climbed 12.83% from 2,034.97 to 2,296.08. Individual stocks also posted double-digit gains, including Shinhan Financial Group Co., Ltd. (17.14%), Hana Financial Group Inc. (14.49%), KB Financial Group (13.93%), Samsung Securities (14.74%), and Kiwoom Securities (13.7%).
Financial stocks emerged as a "refuge" during the sharp market decline because of their attractive valuations. They had risen sharply earlier this year on expectations of shareholder returns, but have moved sideways since March, making their valuations more appealing.
Kim Eun-gap, a researcher at Kiwoom Securities, said, "There was no clear positive catalyst for the banking sector, but banks gained relative attention as semiconductor stocks that had led the KOSPI fell." He added, "Despite earnings growth, the price-to-book ratio (P/B ratio) has fallen to 0.70 times, making valuations more attractive." He also noted, "Whether bank stocks can continue to outperform the KOSPI will likely depend more on semiconductor stock movements than on bank-specific issues."
Brokerage stocks are also gaining renewed attention as trading volume surges fuel expectations of a re-rating. Average daily trading value in the domestic stock market in the second quarter rose by more than 35% from the previous quarter, raising expectations that brokerage income will improve in earnest.
Jung Tae-joon, a researcher at Mirae Asset Securities, said of Samsung Securities, "It is expected to be the biggest beneficiary of the surge in trading volume." He added, "Its dividend yield for this year is expected to reach 7.0%, making its valuation appeal clear."
Consumer stocks also emerged from the shadows. The KRX Consumer Staples Index rose 8.53% over the same period, from 1,523.42 to 1,653.39.
Cosmetics stocks were especially notable. Backed by expectations of improved earnings, Kolmar Korea (29.88%) and Amorepacific Corporation (24.95%) surged over the week. Analysts say cosmetics stocks, which had been left behind amid the "semiconductor concentration" trade, are benefiting from a rotation as leading stocks take a breather. Buying also spread beyond cosmetics to consumer staples more broadly, including food and retail. GS Retail (16.55%), Lotte Wellfood (10.99%), and CJ CheilJedang (9.52%) all rose sharply.
Funds flowed in as investors focused on undervalued stocks. Park Hyun-jin, a researcher at Shinhan Investment & Securities, said of Kolmar Korea and others that "rapid top-line expansion and earnings improvement are expected to stand out."
Still, some say it is too early to call the recent rebound a true "revival" for consumer and financial stocks. An official in the investment banking industry said, "As long as they cannot catch up with the pace of earnings improvement at Samsung Electronics and SK hynix, the market will likely remain centered on semiconductors for now." The official added, "If semiconductors regain momentum, funds that had moved into defensive stocks could shift back quickly."
fair@fnnews.com Han Young-joon Reporter