Since Lee Jae-myung's inauguration, the KOSPI index has been setting new records daily. It appears that foreign capital has been flowing into the stock market for four consecutive transactions, driven by the resolution of political uncertainty and the promotion of commercial law amendments.
On the 9th, the KOSPI index closed at 2855.77, up 43.72 points (1.55%) from the previous transaction. The index started at 2841.39, up 1.04% from the previous day, and increased its gains. Foreigners made a net purchase of 6.594 billion won, while individuals and institutions made net sales of 2.144 billion won and 4.178 billion won, respectively.
In the KOSPI market, leading semiconductor stocks Samsung Electronics and SK hynix showed particular strength. Samsung Electronics and SK hynix both surpassed 60,000 won and 230,000 won during trading. However, their gains slightly narrowed, closing at 59,800 won and 229,000 won, respectively. Foreigners also focused on the two stocks, purchasing 4,779,805 shares of Samsung Electronics and 1,051,668 shares of SK hynix.
President Lee Jae-myung has proposed a 'semiconductor industry support plan' as his first pledge, stating, “I will make Korea the world's top semiconductor country.” During his first economic schedule as a presidential candidate, he visited the SK hynix Icheon campus and also pledged to invest 100 trillion won in national high-tech strategic industries, including artificial intelligence (AI).
Im So-jeong, an analyst at Eugene Securities, noted, “The price increase in the second quarter greatly enhances the prospects for improved performance of memory corporations,” adding that “Samsung Electronics has a low risk of stock price decline, and SK hynix is currently undervalued.”
Most of the top 10 stocks by market capitalization in the KOSPI, excluding Samsung Electronics and SK hynix, closed higher. KB Financial ended up about 4% on expectations of the Lee Jae-myung administration's stock market stimulus policy, while Hyundai Motor, Kia, Samsung Biologics, and Samsung Electronics preferred shares also rose at the close. In contrast, LG Energy Solution, Hanwha Aerospace, and HD Hyundai Heavy Industries ended lower.
On that day, the KOSDAQ index closed at 765.21, up 7.98 points (1.06%) from the previous transaction. In the KOSDAQ market, foreigners made a net purchase of 151.6 billion won, while individuals and institutions made net sales of 10.22 billion won and 3.96 billion won, respectively.
Among the top 10 KOSDAQ stocks by market capitalization, Alteogen, PharmaResearch, HUGEL, LigaChem Biosciences, and ABL Bio closed higher. Ecopro BM, HLB, Ecopro, and Rainbow Robotics closed lower.
Since the new government was established, the KOSPI index has been breaking records daily, indicating a bright prospect for achieving a price-to-book ratio (PBR) of 1.0. PBR refers to the ratio of a corporation's total assets to its market capitalization. A PBR less than 1 means that even if all assets of the corporation are liquidated, the market capitalization would not be reached. The domestic stock market has faced the 'Korea discount' controversy due to consistently low stock valuations below a PBR of 1.
Lee Jaewon, an analyst at Shinhan Investment Corp, stated, “The KOSPI index's 12-month trailing PBR of 1.0 is nearing 2991 points based on the FN Guide,” adding, “The new government's momentum is challenging to reach a book value of 1.0.”
Kim Ji-won, an analyst at KB Securities, also noted, “The domestic stock market surged to near a PBR of 1 due to foreign buying driven by expectations of the new government,” adding, “Though there may be burdens from short-term rises, expectations remain high for policy specificities.”
The exchange rate closed at 1355.3 won, down 7.4 won from the previous transaction, entering the 1350 won range.