◆Aju Economy top stories
▷Foreign investors jump on momentum, concentrating net buying in soaring shares
-According to the Korea Exchange on May 5, the top 10 stocks most heavily net-bought by foreign investors on the main KOSPI market at the end of last month all posted positive returns compared with the end of March.
-The biggest foreign net buy on the KOSPI last month was Samsung Electronics, totaling 1.3231 trillion won. Over the same period, the stock jumped 32%, to 220,500 won from 167,200 won.
-SK hynix, the No. 2 net-buy, rose 59%. With Samsung Electronics and SK hynix reporting record first-quarter results, expectations that semiconductor earnings will keep improving appear to have lifted share prices.
-On the KOSDAQ, foreign money flowed into growth stocks. Many of the top net-bought names were tied to semiconductor equipment, AI semiconductors and biotech, and posted sharp gains.
-In particular, many of the KOSDAQ’s top net-buy picks have shifted toward semiconductor equipment, materials and AI infrastructure, underscoring a trend of capital concentrating in “core supply chains” even within growth industries. Securities firms said foreign inflows are moving around two main themes: AI and semiconductors, and power infrastructure.
◆Key report
▷Why the KOSPI is surging: Semiconductors are beating high oil prices [iM Securities]
-The AI-driven semiconductor rally is continuing. The Philadelphia Semiconductor Index has surged 55% since the start of the year, far outpacing gains in the “M7” and the Nasdaq index.
-The rally is also providing strong momentum for the economies and stock markets of major chip-producing countries such as South Korea and Taiwan. Another key point is that the semiconductor rally is offsetting the shock from high oil prices.
-In past periods of high oil prices, global markets — especially South Korea’s — typically showed vulnerability. This time, an exception is emerging. iM Securities said the main reason the KOSPI can rally strongly, unlike in previous high-oil periods, is a sharp increase in the semiconductor trade surplus that more than offsets the oil trade deficit.
-The report said oil prices are expected to remain elevated, fluctuating around $100, but given the semiconductor cycle, the gap between the semiconductor trade balance and the oil trade balance is likely to stay positive, with room for the surplus to widen further.
-It added that a proxy for South Korea’s terms of trade — the difference between the semiconductor price increase rate and the oil price increase rate — is also likely to remain positive for a considerable period, supporting expectations for strong momentum in the domestic economy and stock market in the second half even amid high oil prices.
◆Major disclosures after the close (May 4)
▷Stage One Entertainment: 1 billion won third-party allotment rights offering
▷GS E&C: Won 680 billion contract for Seocho Jinheung Apartments reconstruction project
▷Lotte Chilsung: Q1 operating profit 47.8 billion won, up 91.2% from a year earlier
▷Pan Ocean: Q1 operating profit 140.9 billion won, up 24.4% from a year earlier
◆Fund flows (as of April 29, excluding ETFs)
▷Domestic equity funds: +28.1 billion won
▷Overseas equity funds: -86.5 billion won
◆Key events today (May 6)
▷South Korea: Consumer Price Index (April)
▷China: Caixin services PMI (April)
▷United States: ADP private employment report (April)
▷Eurozone: Producer Price Index (March)
* This article has been translated by AI.
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