South Korean Stock Market Approaches Bull Territory
South Korea’s Kospi index has risen by 18%, and its stock market is nearing a bull market as foreign investors focus on AI stocks, and local investors grab up shares related to electric vehicle batteries. This rise in the Kospi index mirrors Japan’s Topix and Taiwan’s Taiex indices, which also experienced impressive gains this year because of their strong contributions from chip makers.
Conversely, while South Korea’s stock market rises, China’s stocks are falling due to doubts about its economic recovery. The Hang Seng is down 2% this year, and China’s leading benchmark of onshore listed companies, the CSI 300, is down 1%.
The rally in South Korean stocks comes after a profound rout last year, triggered by rate hikes, high inflation, and a slowdown in South Korea’s economy. Samsung Electronics, which accounts for more than 20% of the Kospi index, is the largest contributor to the Kospi’s surge. Meanwhile, SK Hynix, another chipmaker, provides the second-biggest boost as foreign investors bet on global demand for chips. LG Energy Solutions, the world’s second-largest battery manufacturer, also posted a 38% increase this year, while steelmaker Posco Holdings, whose subsidiaries achieved a series of upstream investments in the global battery supply chain, grew by 42%.
The Rise of Korean Entertainment Stocks
Korean entertainment stocks are also on the rise, with the four leading K-pop agencies reporting a share growth of at least a third this year. This impressively doubled the Kospi’s advance and even outpaced global record labels like Universal Music Group and Warner Band.
Analysts suggest that Korean stocks remain relatively cheap, with the Kospi index trading at a one-time price-to-book ratio compared to two times for Taiwan’s Taiex and Japan’s Nikkei index, and over four times for the US S&P 500 index. Despite this, Fitch Ratings analysts caution that Samsung Electronics and SK Hynix, which make advanced memory chips in China, could be impacted by the intensifying technology rivalry between the US and China.
Caution and Optimism in the Korean Stock Market
Despite the optimistic sentiment sweeping South Korea’s stock market, analysts express caution, noting that more extreme rulings or bans could impact valuations at Samsung and SK Hynix. Choi Joon-chul, the head of VIP Research & Management, further adds that some of the battery-related stocks are outperforming their fundamentals, and driving demand from enthusiastic Korean retail investors.
As overseas funds continue flowing into the market after last year’s strong sell-off, there are limits to the technical rebound without improvements in fundamentals. Nonetheless, the increase in foreign investment and retail investors suggests that the South Korean stock market is once again on the rise.
Summary
South Korea’s stock market is approaching bull territory, with the Kospi index up 18% this year, driven by a surge in AI stocks and EV supply chain-related shares. The rally in South Korean stocks follows last year’s significant downturn, triggered by rate hikes, high inflation, and a slowdown in South Korea’s economy. Despite the rise, analysts express caution noting that Samsung Electronics and SK Hynix could be impacted by the intensifying technology rivalry between the US and China, while some battery-related stocks are outperforming their fundamentals.
South Korean Entertainment Stocks Stepping Up
There has been an increase in the stocks related to South Korean entertainment with the four leading K-pop agencies reporting at least a third growth in share this year. This is a result of the excellent performances of their global and local talents as well as Kpop’s recent sensationalization in the international market. As a result, Korean entertainment companies such as the Big Hit Music family, which manages famous artists like BTS and TXT, have set a foothold in the international music industry and entered the US and UK’s soloist-oriented markets. Since the start of 2021, HYBE’s share prices have increased at least 2.5% as a reaction to its first-quarter performance recording an increase in sales and operating profit.
Korea’s Entertainment Industry Overcoming Cultural Differences
South Korea’s entertainment industry has found a way to overcome language and cultural barriers to break into the international music market. In April 2019, K-pop group BTS made history, when their album, Map of the Soul: Persona, debuted at the top of the US album charts. It was the first album in history that featured entirely non-English songs. BTS preaches a positive message of self-love and self-acceptance, which has endeared them to fans worldwide, and attracted millions of fans worldwide.
The Korean entertainment industry has made several innovations and improvements to keep pace with technological advancements. Korean musicians and artists have released captivating music videos, which have high production values and fascinating storylines that keep fans interested and engaged. US music charts are now recognizing K-pop as serious competitors for the English pop genre, allowing them to top the charts for the first time in history.
Korean Technology: The Rise of AI
Korea’s rise as an AI leader is attributed to digitalization and the government’s investment in AI research and development. The Korean government aims to create a smart society where AI is integrated into everyday life, including public safety, mobility, healthcare, and environment monitoring. In Seoul, for instance, a new downtown area is being repurposed as an AI hub, complete with self-driving public transport and robots that assist with traffic control and respond to emergency situations.
The Korean government hopes to create a peaceful and prosperous society with the integration of AI technology. Simultaneously, companies like Samsung and LG are investing in AI technology to manufacture products that appeal to tech-consumers worldwide. For instance, robotics and AI technologies are increasingly integrated into home appliances like refrigerators and washing machines. As the global demand for AI-based products and services increases, the market for South Korea’s tech industry continues to thrive.
Conclusion
South Korea’s stock market is nearing bull territory, driven by a surge of AI stocks and demand for EV supply chain-related shares. Korean entertainment stocks are also rising due to the popularity of K-pop groups and the growing international demand. Despite the rise, analysts are cautious about the impact of the intensifying US-China tech rivalry on Korea’s chip makers. Despite this, the Rise of AI and innovation in technology development and government push towards AI research and development has helped Korea to emerge as a leader in AI.
—————————————————-
| Article | Link |
|---|---|
| UK Artful Impressions | Premiere Etsy Store |
| Sponsored Content | View |
| 90’s Rock Band Review | View |
| Ted Lasso’s MacBook Guide | View |
| Nature’s Secret to More Energy | View |
| Ancient Recipe for Weight Loss | View |
| MacBook Air i3 vs i5 | View |
| You Need a VPN in 2023 – Liberty Shield | View |
South Korea’s $1.8 trillion stock market is approaching bull market territory, as foreign investors pile into AI stocks and local investors grab shares related to electric vehicle batteries.
The tech-heavy Kospi is up 18% this year, joining a wave of other indices in the region, including Japan’s Topix and Taiwan’s Taiex, which was driven largely by strong gains for stocks. shares of chip makers.
Conversely, Chinese stocks are falling due to doubts about its own economic recoverywith Hong Kong’s Hang Seng down 2% this year and the CSI 300, China’s leading benchmark of onshore listed companies, down 1%.
Global funds bought 12 billion net Wins ($9.5 billion) of Korean stock this year after a three-year hiatus, spending about 10.5 billion Wins in Samsung Electronics stock.
The rally was driven by tech hardware exporters, with foreign investors returning to emerging markets concerned about the impact of the US Fed’s rate-hiking easing cycle. It follows a profound rout last year, triggered by rate hikes, high inflation and a slowdown in South Korea’s economy.
Samsung Electronics, which accounts for more than 20% of the Kospi index, is the largest contributor, up nearly 40% from its September low.
Fellow chipmaker SK Hynix also provided the second-biggest boost as overseas investors bet the global rush on AI will fuel demand for chips, following the November launch of ChatGPT and Nvidia’s recent rally.
“AI-related euphoria served as a trigger for the rally in chip makers on top of growing expectations for the sector’s recovery in the second half,” said Lee Chai-won, president of Life Asset Management.
Local investors are buying shares in companies that are part of the EV supply chain. Korean battery manufacturers and manufacturers are expected to benefit from the rapid expansion of the global EV market and the US Inflation Reduction Act, which aims to curb China’s grip on the green energy sector.
LG Energy Solutions, the world’s second largest battery maker, posted a 38% increase this year, while steelmaker Posco Holdings, whose subsidiaries achieved a series of upstream investments in the global battery supply chain, it was up 42%.
Shares of the country’s four biggest K-pop agencies – Hybe, SM Entertainment, YG Entertainment, JYP Entertainment – have risen by at least a third this year, doubling Kospi’s advance and outpacing global record labels like Universal Music Group and Warner Band.
“There are still some macroeconomic risks, but investors seem to think the worst is over,” said James Lim, an analyst at US hedge fund Dalton Investments. “They are pouring into industries with secular and structural growth regardless of the economic cycle, such as batteries, artificial intelligence and entertainment.”
Lim added that Korean stocks still remain largely cheap, with the Kospi index trading at a one-time price-to-book ratio, compared to two times for Taiwan’s Taiex and Japan’s Nikkei index. and over four times for the US S&P 500 index. .
But analysts also expressed caution, noting that Samsung Electronics and SK Hynix, both of which make advanced memory chips in China, have found themselves embroiled in the intensifying technology rivalry between Washington and Beijing.
In a recent note, analysts at Fitch Ratings said the credit profiles of the two chipmakers “may absorb” recent measures, including US export controls on advanced chip technology and a Chinese ban on chips made by the company. US rival Micron.
However, they acknowledged that “more extreme rulings or bans” could impact valuations at Samsung and SK Hynix.
Choi Joon-chul, head of VIP Research & Management, also said that “some of the battery-related stocks are outperforming their fundamentals,” noting that they were driven by demand from enthusiastic Korean retail investors.
“Overseas funds are flowing back into the market after last year’s strong sell-off,” said Lee. “But there’s a limit with this technical rebound, without improvements in fundamentals.”
https://www.ft.com/content/4d00d49d-8738-4032-9431-24a2590400ac
—————————————————-