The End of the War Is Meaningless Now, There's a Real Threat Elsewhere

Summary

Baro Asset Management Managing Director Yoon Jeong-sik joins Double Up to discuss the Korean equity market after a strong 8% rally in KOSPI driven by foreign buying and semiconductor news. He explains why foreign inflows may be temporary but highlights the potential MSCI developed market watch list as a catalyst. The core investment thesis remains a structural AI semiconductor boom favoring Samsung Electronics and SK Hynix, while department store and cosmetics stocks offer a lower-volatility alternative for diversification. He advises focusing on earnings and accepting short-term volatility rather than chasing headlines.

• KOSPI surges over 8% with foreign investors returning, but Yoon expects foreign buying to be temporary due to EM allocation constraints.
• Potential inclusion in the MSCI developed market watch list could end the foreign selling trend and is a key event to monitor.
• AI is in early stages, making the semiconductor cycle structurally different; peak-cycle fears are premature.
• Samsung Electronics and SK Hynix are the main beneficiaries with strong earnings growth and cheap valuations at least through 2027.
• Department store and cosmetics stocks have strong unrewarded earnings and can serve as portfolio stabilizers when semiconductor stocks are volatile.
• The USD/KRW exchange rate around 1,500 is high but unlikely to spike further because of large corporate dollar holdings.
• KOSDAQ has bottomed and is recovering, but KOSPI's large-cap semiconductor names are expected to outperform in the near term.
• Interest rate policy remains the primary macro risk, but aggressive hikes appear limited as economic indicators stabilize.