The main character of the stock market last year was the KOSDAQ index. It ranked first among the indexes of major countries with an increase rate of 45%. However, it hardly climbed this year. This is because interest in small and mid-cap stocks declined as the large-cap rally continued. However, there is a prospect that it is time for small and medium-cap stocks to move. On the 26th, the KOSPI index received a large adjustment, but the KOSDAQ index exceeded 1000 during the intraday, showing the possibility of an increase.
Cheonsdaq, the first since the dot-com bubble
On the 26th, the KOSDAQ index rose 4.29 points and started trading at 1003.59. It also crossed the 1006 line in the morning. Since then, when the global stock market was adjusted, it fell together. It is the first time since September 15, 2000, when the information technology (IT) bubble occurred that the KOSDAQ index exceeded 1000.
Institutions and foreign investors led the decline, selling 3756 billion won worth. Individuals bought 4146 billion won worth to defend the stock price.
Stock prices gave meaning to the fact that the KOSDAQ index fell short. On that day, the KOSDAQ index fell 0.53% to 994.00, while the KOSPI index plunged more than 2%. Compared to major markets such as China’s Shanghai Composite Index (-1.51%), Hong Kong Hang Seng Index (-2.55%), and Japan’s Nikkei Index (-0.96%), the performance was good.
It is analyzed that the circulation sale continues as a stock in the KOSDAQ market. It is the strength of low-cost merit and advancement in small and medium-sized technology stocks. Jeong Yong-taek, head of the IBK Investment & Securities Research Center, explained, “The KOSDAQ index has hardly risen compared to the KOSPI index since December last year.” In particular, it is an analysis that the KOSDAQ market has begun to attract attention as funds have come in to small and medium-sized technology stocks that have increased relatively less.
“Attention to marginalized small and medium-cap stocks”
The stock market contends that it is time to pay attention to small and medium-cap stocks. This is because the price merits of small and medium-sized stocks in the KOSDAQ market stand out as large-cap stocks in the securities market surge all at once. The KOSDAQ market PER is 1.3x compared to the securities market’s stock price-to-earnings ratio (PER), below the 10-year average of 1.4x.
Sang-ho Kim, a researcher at Shinhan Investment Corp. said, “When the KOSDAQ PER was relatively low, the KOSDAQ index increase rate significantly exceeded the KOSPI index increase rate.” In fact, the rate of increase in the KOSDAQ index in 2012-May 2013 and 2017-2018 was 14.4% and 26.3%, respectively, far exceeding the KOSPI index increase rates of 1.9% and 10%. This is the time when the KOSDAQ PER was low.
KTB Investment & Securities recommended small and medium-cap stocks that belong to high-growth industries as profits improved this year. L&K Bio(42,600 -5.54%)(Medical device), Intellian Tech(74,000 +2.49%)(Universe), Hwanin Pharmaceutical(18,550 +2.77%)(Mental Health), Baekkwang Industry(4,385 -3.31%)(Material localization), SPECCO(11,600 +2.20%)(Wind Power), RN2 Technology(20,500 -2.61%)(Autonomous driving), Russell(5,340 +11.72%)(Semiconductor), tyrobotics(8,420 -3.22%)(Robot) etc.
Kyobo Securities is expected to improve earnings this year, and KH Vatech(18,950 -0.79%), Amotech(39,050 +1.17%), Wemade(40,850 +0.62%), Sekyung Hi-Tech(23,850 +5.76%), CJ Freshway(22,550 -0.22%) Recommended. SM(32,900 -2.52%)And YG Entertainment(52,000 +0.39%) Etc. Enter the Captain and STI(20,550 +7.03%), Tech Wing(25,200 +7.92%) Semiconductor equipment stocks were also introduced as recommended stocks.
Resumption of short selling is good?
Shinhan Investment & Securities presented the top picks with earnings momentum and an increase in the majority shareholder’s stake. Compared to large-cap stocks, small- and mid-cap stocks are highly likely to be closely related to management by large shareholders. Com2uS(172,600 -1.37%), SFA(41,150 +1.60%), Nice evaluation information, Webzen(39,300 -6.65%), ITM Semiconductor(56,100 +1.08%), PI Advanced Materials(42,250 -1.40%) Etc. were selected as the sports that meet these conditions. Researcher Sang-ho Kim said, “If the profit outlook is revised upward and the share of the majority shareholder increases, the reliability can be evaluated as high.”
The securities industry is betting on the fact that the KOSDAQ has gained a lot of good news. There is also an analysis that short selling, which is expected to resume as early as March, will be a good news for the KOSDAQ. This is because the ban on short selling is expected to be lifted from large stocks in the securities market. This explains that it could be a catalyst for moving individual buying, which is concentrated in large-cap stocks, to small and mid-cap stocks. KTB Investment & Securities said, “There is a possibility of moving from the securities market to the KOSDAQ due to the nature of individuals with high resistance to short selling.”
It is analyzed that the avoidance of pension funds, a chronic problem of KOSDAQ, is also improving. On the 19th, the government announced a plan to increase the proportion of pension funds invested in KOSDAQ, which is currently 1~2%.
Reporter Park Uimyung [email protected]