Semiconductor stocks will pass the baton to finance and healthcare stocks in the second half in the global rally that began early this year and now is the time to pay more attention to European stocks than to American stocks, said a top investment strategist at Wall Street.

Jay Yoon, chief investment officer (CIO) of New York Life Investment Management LLC, told Maeil Business Newspaper on Sunday that the upward trend of semiconductor stocks would be somewhat mitigated by increasing supply over robust demand late this year, adding that the price of key semiconductor has risen too fast in the past months.

Since September 2015, Yoon has served as CIO of the asset management subsidiary of New York Life, one of the top three U.S. life insurers along with Metlife and Prudential. His asset under management stands at 300 trillion won ($261 billion).

“The same would be applied to IT stocks. The situation would not go bad for the moment but they would not see as sharp a rise as in the past.” He admitted tech stocks are now expensive but brushed aside concerns that there is a tech bubble about to burst. Touching on the Kospi’s recent rally, he said Korea and Taiwan, the two strong producers of memory chips, are benefited from the global rally in the semiconductor industry.

He picked finance and healthcare stocks as promising for the second half of this year, citing that U.S. rate hike and the upward trend in interest rates globally would continue raising the charm of finance stocks. Healthcare stocks are positive amid global demographic changes and an ongoing shift towards the fourth industrial revolution, he explained, adding “Many global investors are already eyeing these two sectors.”

Regarding a possible change in the U.S. monetary policy, Yoon said “The Federal Reserve is very likely to start tapering its asset-purchase program from September because the central bank has no reason to delay tapering on strong macro indicators like Purchasing Managers’ Index (PMI).”

Korea and other emerging economies must be more careful about European tapering than American one, Yoon advised, because rate hikes in Europe would be faster and wider than the U.S. given European interest rates have been left too low for a long time. But for now, European tapering does not look imminent as the European Central Bank continues its monetary easing approach and inflation shows no sign of pickup in the region.

By Kim Hyo-hye

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