Summary

  • The Kospi has fallen 12.42% this month, but telecom stocks and companies that announced share buybacks and cancellations have held up relatively well.
  • Major telecom carriers including KT, LG Uplus and SK Telecom, along with share buyback and cancellation names such as Krafton, Hyundai Department Store and Kakao, were among the stronger performers.
  • Analysts said sectors worth watching in the downturn include defensive industries, telecoms, banks, pharmaceuticals and biotech, K-content and food and beverage.

Forecast Trend Report by Period

South Korea’s Kospi has fallen more than 12% this month, but telecom stocks and companies that announced share buybacks and cancellations have held up relatively well. Semiconductor shares suffered steeper losses.

The Kospi closed down 40.84 points, or 0.81%, at 5,018.85 on Nov. 9. According to MP Doctor, the benchmark index posted a cumulative decline of 12.42% from Nov. 2 through Nov. 9. The KRX Semiconductor Index fell 18.6% over the same period.

By sector, the consumer discretionary index rose 10.38%, the best performance among all industry groups. The broadcasting and telecommunications index also gained 8.53%. The bank index fell 2.37%, while the healthcare index slipped 0.75%.

All three major telecom carriers advanced. KT rose 12.74%, LG Uplus climbed 12.30%, and SK Telecom added 2.65%. The gains were driven by expectations for improved earnings and expanded shareholder returns. LG Uplus is pursuing a 90 billion won ($65.1 million) share buyback. KT appears set to resume a 250 billion won ($180.8 million) buyback in the first half of next year.

According to Shinhan Securities, projected shareholder return yields for 2027 are 7.7% for KT, 5.1% for LG Uplus and 4.4% for SK Telecom.

Stocks that announced share buybacks and cancellations also traded higher. Krafton jumped 19.44% after announcing in early November that it would buy back and retire 300 billion won ($217 million) of shares. Hyundai Department Store gained 10.92% after disclosing it would cancel 21 billion won ($15.2 million) of treasury shares it had already acquired. Kakao rose 9.00% after announcing in early November a 150 billion won ($108.5 million) share buyback and cancellation. Expectations for stronger shareholder value supported investor sentiment.

Kim Dae-jun, an analyst at Korea Investment & Securities, said semiconductors and hardware could rebound quickly if additional catalysts emerge, though they are unlikely to replicate their past performance. He added that investors need to include sectors with stronger resilience than the broader market in their portfolios. In the current weak patch, he pointed to healthcare and secondary batteries, which have fallen less than the Kospi, as well as telecom and transport names with company-specific catalysts.

Lee Kyung-min, an analyst at Daishin Securities, highlighted telecoms, banks, pharmaceuticals and biotech, K-content, and food and beverage as sectors either attempting to break above their 40-day and 50-day moving averages or showing a strong chance of a reversal in sentiment. Short-term swings, he said, should be used as an opportunity to increase exposure.

Minseung Kang