South Korean banking and financial holding stocks, which recently underwent a correction in their share prices, rose simultaneously in early trading on Monday, fueled by expectations of earnings and the government‘s corporate value-up policy.

Hana Financial Group shares traded at 55,800 won ($40.38) as of 9:12 a.m. on Monday, up 6.49 percent from the previous trading day.

Shinhan Financial Group also saw its shares rise by 5.63 percent, while those of Jeju Bank gained by 5.1 percent, KB Financial Group 5.18 percent, Woori Financial Group 4.28 percent, JB Financial Group 3.92 percent, BNK Financial Group 3.36 percent, DGB Financial Group 3 percent, KakaoBank 2.53 percent, and Industrial Bank of Korea (IBK) 2.47 percent.

The banking sector is set to kick off its first quarter 2024 earnings season on Monday, starting with JB Financial Group. KB Financial Group is slated to report on April 25th, followed by Shinhan Financial Group, Hana Financial Group, and Woori Financial Group a day later, while Industrial Bank of Korea will report on April 29th.

“Aside from the voluntary compensation for Hong Kong equity-linked securities (ELS) losses and foreign currency translation losses due to the rise in the won/dollar exchange rate, there are few one-time factors, and there is also no large-scale additional reserve recommendation from regulatory authorities,” Hana Securities Co analyst Choi Jeong-wook said. “It is also likely that banks’ first-quarter earnings will slightly exceed the consensus (average of earnings forecasts), which has already been lowered due to one-time expenses.”

The government‘s reaffirmation of its commitment to corporate value-up measures, which rekindled expectations that had waned after the general elections, also contributed to the strength of financial stocks, which are typical valuation beneficiaries.

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok said the previous day that the government will impose separate taxes on the dividend income of shareholders of companies expanding dividends and introduce corporate tax credits for companies that have increased efforts for shareholder returns, such as share buybacks.

This clarification has led to expectations for the government’s value-up policy legislation. The deputy prime minister added that “there may be differences in specific details, but I hope that both ruling and opposition parties can find some common ground.”

Meanwhile, Korean semiconductor stocks declined on Monday in the aftermath of U.S. chip maker Nvidia Corp.’s 10 percent plunge on the New York Stock Exchange ahead of the weekend.

Samsung Electronics Co. shares traded at 77,300 won, down 300 won, or 0.39 percent from the previous day as of 9:08 a.m.

SK hynix Inc. also saw its shares fall 4,200 won, or 2.42 percent, to 169,100 won.

Other semiconductor-related stocks such as DB HiTek Co. (-0.61 percent), Hanmi Semiconductor Co. (-4.84 percent), Leeno Industrial Inc. (-4.75 percent), and Dongjin Semichem Co. (-1.01 percent) also saw declines in their shares.

Nvidia shares plummeted by 10 percent on the New York Stock Exchange on Friday (local time), resulting in a market capitalization loss of $2 trillion. Super Micro Computer, Inc., Advanced Micro Devices, Inc., and Broadcom Corp. shares also fell by 23 percent, 5.4 percent, and 4.3 percent respectively, leading to a 4.12 percent decrease in the Philadelphia Semiconductor Index.

By Pulse

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