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With the recent surge in US Treasury yields, the color of leadership in the domestic stock market is also changing. While growth stocks such as technology stocks, which have received attention in the bullish market, have turned to weakness, relatively marginalized industries such as steel, energy, materials, and banking stocks are remarkable. The sharp rise in US Treasury bond yields is interpreted as a result of inflation and expectations for an economic normalization.
Individual investors are also facing growing concerns over their March investment strategy. Since last year, it has been net buying domestic stocks worth nearly 100 trillion won, and the KOSPI 3,000 line is shaking. Since the rise in bond yields is highly likely to continue for the foreseeable future, stock prices advise to pay attention to undervalued mid-cap stocks that have a strong earnings improvement engine.
Steel stock February yield 10%
According to the Korea Exchange on the 28th, the industry with the highest share price increase rate in the domestic stock market in February was steel stocks. Steel stocks are considered traditional economically sensitive stocks. The KRX Steel Index, consisting of 10 domestic steel companies, rose 9.87% last month. During this period, the KOSPI index rose only 1.23%, showing a remarkable rise compared to the sideways movement. POSCO, the leader in the steel industry(281,500 -0.53%)Jumped 14.66% last month. In addition, Poongsan (28.42%), Youngpoong (20.16%), SeAH Besteel(14,700 -1.34%)(20%), Korea Steel(16,500 -5.44%)(17.02%) also recorded a high rise in share prices.
Bank stocks, which have been sluggish for a long time, are also trying to rebound in line with rising interest rates. The KRX bank index rose 9.50% last month, following the steel index. Hana Financial Group for a month(37,050 -2.11%)(13.48%), JB Financial Group(5,830 -0.85%)(12.55%), DGB Financial Group(7,070 -0.98%)(10.99%), Woori Financial Group(9,580 -2.44%)(8.86%), KB Finance(43,800 -2.12%)(8.68%), Shinhan Holdings(32,950 -3.37%)All stocks, including (7.50%), were strong. Banking is a representative industry that benefits from increasing net interest margin (NIM) when interest rates rise.
Steel stocks and banking stocks are industries that recorded negatives only a month ago. January index returns were -6.8% for banks and -3.34% for steel. In addition to steel and banking, industry indexes such as transportation (8.24%), insurance (7.96%), construction (5.12%), and broadcasting and communications (4.23%) also rebounded in February. On the other hand, the automobile and information technology (IT) sectors that led the KOSPI index’s sharp rise in January turned to weakness in February. The KRX Automobile Index, which rose 21% in January, fell -2.04% last month.
In the ETF market, growth stock ETFs such as bio and rechargeable batteries fell sharply, while commodities related to raw materials, energy, steel, and travel showed strong strength. The’TIGER KRX Bio K-New Deal’ ETF fell 10.79% last month, recording the largest decline among domestic equity-type ETFs. On the other hand,’KODEX Steel’ and’TIGER Travel & Leisure’ recorded an increase of around 10%. In addition, the raw material ETF’TIGER copper real’ (26.13%) and’KODEX WTI crude oil futures’ (20.74%) also surged.
Pay attention to mid-cap value stocks that will improve performance
In the financial investment industry, as the index bull market led by growth stocks is being adjusted, it is time to pay attention to medium-sized value stocks with earnings improvement momentum. It is explained that this year is a time when’covering the boulders’ for each stock becomes important as the market shifts from the market where liquidity was boosted last year to the performance market.
Lee Kyung-soo, a researcher at Hana Financial Investment, said, “As the growth engine of KOSPI’s large-cap stocks has slowed, expectations for index rise have declined, while mid-cap stocks are increasing demand for stocks that will generate alpha (α) profits relative to the market. Oh Hwa-young, a fund manager for Midas Asset Management, also said, “The gap between large companies such as the KOSPI 200 and small and mid-cap stocks has widened at a record level.” There is” he observed.
Hyosung TNC is a stock that stands out with the attractiveness of the stock price as its earnings are expected to improve this year.(411,000 -1.67%), HMM(19,000 +3.26%), SL(23,700 +1.94%), Kumho Petroleum(211,000 -4.31%), SeAH Besteel, Samsung Securities(36,550 -3.82%), Tess, Korea Financial Group(87,300 -5.11%), Kolon Industries(55,000 +3.97%), BNK Financial Group(5,900 -1.34%), Samsung Fire Insurance(173,000 -1.42%), Lotte Shopping(118,500 -3.27%), Mirae Asset Daewoo(9,340 -3.71%), S-Oil(85,000 -3.41%), Doosan Infracore(7,860 -1.63%), SM(30,050 -1.80%), Hana Materials(36,300 -0.82%), Handsome(37,150 -2.88%), Yeonwoo, Wonik QnC(20,100 -2.19%), F&F(139,000 -1.77%), Incross(51,500 -5.16%) The back was counted.
Reporter Seol Ji-yeon [email protected]