Urgent Market Update: August Exports Hit All-Time High; Market Is Weak but Semiconductor and Cosmetics Operating Profit Explodes; Bull Market Starts 'At This Time' | Park Geun-hyung, Department Head

Summary

Park Geun-hyung of IBK Investment & Securities reviews a weak Korean market despite record August exports. He sees semiconductor leadership as still important but notes a broadening into non-semiconductor earnings winners such as cosmetics, banks and insurers, batteries and chemicals. He expects September to stay rangebound or soft on FOMC uncertainty and US rate pressure, with a seasonal Q4 rally likely. He suggests maintaining semiconductor exposure while trading sector momentum and foreign inflow themes.

• Korean market is weak despite all-time-high August exports and strong semiconductor data.
• Semiconductor exports rose 209% year over year, and semiconductors dominate KOSPI operating profit, so core semiconductor exposure is maintained.
• Non-semiconductor KOSPI earnings are improving, leading to rotation into cosmetics, batteries, financials, IT hardware, shipbuilding and chemicals.
• Rising US yields and hawkish Fed commentary make banks and insurers attractive, but September FOMC remains a source of uncertainty.
• US software stocks are rallying and taking some momentum from semiconductor hardware.
• Seasonality suggests September weakness but a KOSPI recovery into October through December.
• Retail buying power is exhausted and supply is weak, but foreign selling is slowing and buybacks cushion downside.