Super-rich Koreans eye EV, battery stocks for growth potential

2023.09.20 11:26:01 | 2023.09.20 14:29:33

[Image source: Gettyimagesbank]이미지 확대

[Image source: Gettyimagesbank]

Six out of 10 super-rich Korean investors plan to increase their stock holdings by the end of either this year or next year, a recent survey showed. In terms of promising stocks, they named electric vehicle (EV) and battery stocks, indicating a preference for investing in growth stocks over value stocks or dividend stocks.

According to a survey jointly conducted by Maeil Business Newspaper and Samsung Securities Co. of 108 high-net-worth individuals with assets exceeding 10 billion won ($7.5 million), 63.9 percent of super-rich investors stated that they would expand their domestic and international stock holdings by the end of this year or next year. Among those who want to increase their stock investments, 50.7 percent favored investing in growth stocks, followed by value stocks at 26.1 percent and dividend stocks at 15.9 percent. A minority, comprising 7.2 percent, preferred strategic or trend-driven stocks in terms of returns.

“These investors seem to be seeking profit opportunities, particularly in emerging growth industries, as the macroeconomic environment calms,” according to Kim Seong-bong, an executive in charge of wealth management services at Samsung Securities. One unnamed high-net-worth individual stated that many are interested in growth stocks with relatively high potential for price appreciation, adding that it is natural to seek returns exceeding the market average when the value of money is eroded by inflation.

According to the survey, six out of 10 super-rich individuals reported having experienced “successful asset appreciation” via financial product investments, including stocks and funds.

While the Kospi saw a 14 percent increase, 29.6 percent of these respondents predicted that their post-tax actual returns would fall within the 10-15 percent range. Responses for expected returns of 5-10 percent and 3-5 percent were 16.7 percent each.

Regarding the most promising stocks for investment, EVs and batteries were the most popular choice among the respondents at 43.5 percent. Despite concerns about the valuation of battery-related stocks due to sharp price increases seen this year among battery and related material makers, including POSCO Holdings Inc., EcoPro Co., and EcoPro BM Co., 36.1 percent of the respondents believed that the stock prices were justified by their growth potential. Among battery stocks, POSCO Holdings and EcoPro were preferred by rich investors over other stocks, according to sources in the private banking industry.

Apart from EVs and batteries, 26.1 percent of the respondents expressed a preference for semiconductor investments, anticipating an industry recovery in the second quarter and a subsequent rebound in the performance of chipmakers, including Samsung Electronics Co. and SK hynix Inc.

The chip industry is considered a leading indicator of the global economy, and many anticipate a recovery in the industry. “Among the most net-bought stocks by these high-net-worth individuals, semiconductor stocks like Samsung Electronics, SK hynix, and Isupetasys Co. take the lead, along with secondary battery stocks,” an unnamed private banker said, adding that Tesla Inc., NVIDIA Corp., and Microsoft Corp. are favored among them in terms of U.S. stocks. Other sectors deemed promising included biotech, at 10.1 percent, consumer goods and retail at 7.2 percent, and renewable energy at 7.2 percent.

Regarding the year-end Kospi level, 44.4 percent of the respondents expected the index to close between 2,600 and 2,800, while 34.3 percent assumed it would remain between 2,400 and 2,600. A minority, comprising 8.3 percent of the respondents, expected the index to surpass 2,800.

As for the most promising investment market in the future, the respondents favored the U.S. stock market the most, with 57.4 percent choosing it due to the high shareholder returns through active share buybacks and a high dividend payout ratio frequently in the market. Others expressed interest in high-growth emerging markets such as Vietnam and India. However, most of the respondents did not view the Chinese market as a very attractive investment destination.

By Cha Chang-hee and Chang Iou-chung

[ⓒ Pulse by Maeil Business Newspaper &, All rights reserved]