Macquarie analysts believe that South Korea's benchmark KOSPI index is set for a near-term rebound, with chipmakers Samsung Electronics and SK Hynix providing the main lift, according to a report relayed by Jinshi. In that report, the analysts attributed July's extreme market volatility largely to those two chipmakers, which together accounted for 71% of the total market capitalization loss. They said market turbulence is now easing as foreign and institutional outflows stabilize, concentrated holdings are repositioned, and margin balances remain at reasonable levels. This, they argue, limits the risk of sudden sharp moves. Macquarie also projects that earnings revisions will push the KOSPI higher, and that Samsung and SK Hynix will shake off concerns about demand peaking and intensifying competition. The firm said the two companies' rapid earnings growth should translate into substantial returns for shareholders. Macquarie has kept its target for the KOSPI unchanged at 8,000 points.
Macquarie analysts said in a report, relayed by Jinshi, that South Korea's benchmark KOSPI is expected to rebound in the short term, led by chipmakers Samsung Electronics and SK Hynix.
The analysts noted that July's extreme swings were driven mainly by those two stocks, which together accounted for 71% of the total loss in market capitalization. Volatility is now easing as outflows of foreign and institutional capital stabilize, concentrated positions are repositioned, and margin financing balances stay at reasonable levels. That limits the risk of sudden sharp swings.
Macquarie expects earnings revisions to push the KOSPI higher, with Samsung and SK Hynix overcoming concerns about peak demand and competition. The two companies' rapid earnings growth should translate into substantial returns for shareholders, the analysts added. The bank kept its target for the KOSPI unchanged at 8,000 points.
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