This week (the 24th to 28th), Korea's stock market is expected to be influenced by Nvidia's earnings release and whether U.S. Government Bonds yields stabilize. Samsung Electronics and SK hynix sparked investor sentiment last week by unveiling large-scale shareholder return policies, and attention is on how much longer this positive driver will continue.
◇ Attention on remarks by Kevin Warsh and Jensen Huang
Nvidia will release earnings on the 26th (local time). Investors are watching not only how closely the results meet market expectations but also whether the high gross margin is maintained, and what is said regarding HBM supply shortages.
Na Jeong-hwan of NH Investment & Securities said, "In this Nvidia earnings release, not only simple revenue growth but also whether there is progress on gross margin and packaging bottlenecks will be the key criteria that determine the sustainability of the AI cycle," adding, "The longer supply constraints persist, the stronger the pricing power of Korea's memory semiconductor corporations could become, serving as momentum for a valuation re-rating."
From the 27th to 29th (local time), the U.S. Federal Reserve's Jackson Hole meeting will take place. Federal Reserve Chair Kevin Warsh may mention the recent rise in long-term Government Bonds yields in his speech.
Jeong Hyeong-gi of Mirae Asset Securities analyzed, "Thanks to the U.S. Treasury's expanded buyback measures, the steep surge in long-term yields has entered a calming phase," but added, "For the market to be fully stabilized, what Chair Warsh presents at Jackson Hole regarding his perception of the burden from rising long-term rates and the possibility of policy coordination will be the watershed that determines the stock market's direction."
The Bank of Korea's monetary policy committee (Monetary Policy Board) will decide the base rate on the 27th. As the won-dollar exchange rate settles into the 1,300-won range and declines, the Bank of Korea (BOK)'s upward adjustments to growth and inflation forecasts and its remarks on the pace of tightening are expected to affect the market.
Choi Yu-jun of Shinhan Investment & Securities said, "The fact that the won-dollar exchange rate has settled in the 1,300-won range and reduced FX market volatility is a factor that eases the burden on monetary policy," adding, "If the Monetary Policy Board's message does not fall outside the market's expected range, the foreign inflows opened by the shareholder return policies of leading semiconductor stocks will support the KOSPI's re-settlement above 7,000."
◇ KOSPI shaken by a surge in rates, rebounds on "shareholder returns"
On the 18th to 21st, Korea's stock market wavered amid a shock from global long-term bond yields, as the U.S. 30-year Government Bonds yield broke through 5.3%, the highest in 19 years, and Japan's 10-year yield spiked. The KOSPI finished at 6,912.95 on the 21st, leaving 87.05 points to the 7,000 mark.
With Samsung Electronics and SK hynix rolling out large-scale shareholder return measures one after another, the market is watching whether the valuation re-rating of large-cap semiconductor stocks will continue.
SK hynix announced it would buy back and cancel all of its own shares worth 40 trillion won, and said it would raise its free cash flow (FCF) return standard to "50% or more." Samsung Electronics, under its policy of returning 50% of FCF to shareholders over the past three years, finalized on the 21st the largest-ever shareholder return plan amounting to about 90 trillion to 110 trillion won.
In the market, there is analysis that expanded shareholder returns by Samsung Electronics and SK hynix could not only increase dividend appeal but also serve as an opportunity to ease the chronic undervaluation factors in Korea's stock market.
In particular, given the large weight the two stocks hold in KOSPI's market capitalization, it was observed that if expanded shareholder returns lead to higher valuations for large-cap semiconductor stocks, it could amplify the KOSPI index's upward momentum.