(Tomato column) A market running towards KOSPI 3000

Paradoxically, the biggest catalyst of the bull market is Corona 19. The third coronavirus pandemic is in progress, but the market does not view such bad news as bad news. The greater the pandemic fears and the slower the economic recovery is, the more powerful the stimulus will lead to expectations. In the meantime, liquidity inflows immediately when the stock market shows signs of downward correction.

At the end of last year, KOSPI’s net asset ratio (PBR) exceeded 1x. This means that the market capitalization of all listed companies is greater than their total assets minus liabilities. Until now, this ratio has been below 1 times.

On the 30th, the last trading day of the stock market last year, the KOSPI index rose 31% compared to the end of the previous year, and ranked first among the major 20 countries (G20). It is the power of individual investors represented by’Donghak Ant’. Individual investors raised the index by net buying more than 61 trillion won in the stock market last year. It has been proven that individual investors can also be the main source of supply and demand in the domestic stock market.

The recent KOSPI reported price is largely due to the foreigners’ net buying march, but even if they change their minds again, they can now expect that the Donghak ant corps will drive that momentum again.

In the stock market, which is in the midst of this year’s stock market outlook, it is putting out a target of 3000 KOSPI lines one after another. At last, a securities company presented the KOSPI 3200 line as the top.

In particular, the stock market optimism is convincing in that it came from the improvement of corporate fundamentals. Market experts estimate the annual operating profit of KOSPI listed companies to reach 182 trillion won next year. It is an increase of 38% from this year, and it is a turnaround in three years after the record of 197 trillion won in 2018.

Let’s look at the top 10 companies by market capitalization. Samsung Electronics, SK Hynix, LG Chem, Samsung Biologics, Celltrion, Naver, Hyundai Motors, Samsung SDI, and Kakao. These companies, which had stayed in traditional industries, have equipped new growth engines such as non-memory semiconductors, electric vehicles, bio, and the Internet.

Then, attention is now focused on how to pass well before and after the KOSPI 3000 era. There are things that financial authorities and investors should keep in mind before taking a path that the Korean stock market has not gone through. First, the authorities must minimize the uncertainty of the policy. Short selling (selling by lending stock) will resume in March. Individual investors are keenly aware of what the financial authorities will come up with.

It is necessary to actively communicate with the market and come up with a system improvement plan to correct the’tilted playground’ that is advantageous only to foreigners and institutional investors. It is difficult for the government to pour cold water on the market, as it fluctuated last year over the standard of large shareholders subject to stock capital gains tax.

Investors need to keep the profits from all-time spikes at the pace of overheating. At times like this, your own investment philosophy is more important. There are more than 6 million new stock accounts opened last year. Only the loans (credit transaction loans) focused on the stock market amounted to 19 trillion won. A more robust breakwater is needed for the KOSPI report to go beyond the renewal and for the capital market to become a safe means of increasing national wealth.

Jong-Yong Lee Securities Manager [email protected]

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