There is a saying in Yeouido. It is a common belief that the South Korean securities market performs better in odd-numbered years than in even-numbered years. To get straight to the point, voices in the securities industry are increasingly suggesting that this notion will hold true in 2025 as well. Let's look back from 2024, which was an even-numbered year. The KOSPI index started at 2,645.47 points on Jan. 2 and performed well in the first half of the year. Thanks to the government's value-up project, the index even eyed 3,000 points at one point.

However, the situation changed starting in the second half of the year. High exchange rates and high interest rates persisted, and semiconductor stocks that had led the market began to show weakness. In August, the index experienced a 'Black Monday' with a drop of about 9% in a single day, and this month, due to the impact of the state of emergency, it recorded a yearly low of 2,360.18 points on the 9th. If the index remains around the 2,400 level by year-end, it will finish 2024 down nearly 10% compared to the beginning of the year.

So what about the odd-numbered year of 2025? First of all, the common belief has its own basis. Excluding 2011, the index has risen in all odd-numbered years since 2000. While it hasn't consistently fallen in even-numbered years, it has decreased more than half of the time, with seven declines out of 13 occurrences.

Looking particularly at relatively recent poor-performing years—2018 and 2022—the index recorded a minus (-) 17% in 2018 and -25% in 2022. However, the following years were different. In 2019 and 2023, the index rebounded by 7.7% and 18.7%, respectively.

According to Hana Securities, there were three main characteristics of the successful technical rebounds in 2019 and 2023. First, stocks in the semiconductor and automotive sectors rose significantly compared to the market conditions. Additionally, both institutional and foreign investors recorded net buying. Furthermore, there was a strong conviction that the earnings had hit rock bottom that year.

It is not the case that earnings were good in 2019 and 2023. The operating profit (OP) growth rates for 2019 and 2023 were -29% and -21%, respectively. There was a gap of 33% and 21% compared to the estimates at the beginning of the year, yet the stock prices rose due to the so-called magical term often mentioned in Yeouido, "anticipatory reflection." While the earnings in 2019 and 2023 were poor, investors had confidence that they had reached the bottom.

The operating profit (OP) growth rate for 2025 is projected to be around 21%, but there are many who believe it will fall short of this prediction. In other words, there is a possibility that the theory of an earnings low will spread throughout 2025.

Now, what remains are the semiconductor and automotive sectors as well as institutional and foreign supply and demand. The more evident the slowdown in foreign selling of semiconductor stocks and the stabilization signals of the won-dollar exchange rate become, the higher the likelihood of a technical rebound in the market.

However, what should be done if that does not happen? Lee Kyung-soo from Hana Securities noted, "A methodology suited for a stable strategy that exceeds market revenue, such as high dividends or undervalued stocks, is effective. In January, it is necessary to focus not only on undervalued stocks but also on sectors with excessive price drops and earnings upgrades, particularly the quality factor stocks."