20160217-三星证券-Perspectives_Weekly__Policy-driven_rebound_ahead_18页_911kb

Samsung Market Strategy Summary

Core Content

This document outlines Samsung's market strategy and analysis for the financial markets, focusing on both Korean and global stock markets, with insights on sector fundamentals, valuations, and fund flows. It is authored by Seung Min You, Chief Strategist, and Dong Yeol Moon, Research Associate, from Samsung Securities.

Main Recommendations

• Gradual reduction of equity exposure is recommended due to expected heightened uncertainties in the second half of the year.
• A policy-driven rebound is anticipated in the near term, but prolonged bull runs are unlikely due to limited corporate earnings improvements.
• The strategy favors defensive plays and developed markets (DMs), as investors are re-evaluating risk preferences in light of falling required rates of return and macroeconomic uncertainties.

Key Market Insights

Korean Stock Markets

• Sector Momentum: Utilities, energy, chemicals, insurance, pharmaceuticals, and consumer staples sectors show strong earnings forecast momentum.
• Valuation Trends: The Kospi valuation multiple slightly increased, while the Kosdaq valuation multiple dropped sharply compared to two weeks ago.
• Top Picks:
  • Energy: SK Innovation
  • Materials: Posco, LG Chem
  • Industrials: Hyundai E&C
  • Consumer: Mando
  • Discretionary: CJ CGV, SM Entertainment
  • Consumer Staples: Lotte Chilsung
  • IT: LG Electronics, NCsoft

Global Stock Markets

• Earnings Momentum: Germany and Japan have shown the strongest earnings momentum growth over the past three months.
• Valuation: The Kospi is considered one of the world's most undervalued major stock markets in terms of P/B.
• Sector Analysis: A dashboard of MSCI global markets highlights performance metrics across various sectors, including total returns, P/E, P/B, ROE, and EPS growth.

Sector Valuations and Fund Flows

Sector Valuations

• Forward P/E and P/B: The MSCI Korea dashboard provides detailed data on forward P/E and P/B for different sectors, along with Z-scores and EPS growth forecasts.
• P/B vs ROE: A visual representation of the relationship between price-to-book ratios and return on equity for MSCI Korea sectors.

Fund Flows

• Global Fund Flows: Net outflows are observed in emerging markets (EMs), while developed markets (DMs) see net inflows. The Kospi is a key focus with significant inflows.
• Domestic Fund Flows: Korean equity funds experience net inflows, with domestic institutions and investment trusts being the main contributors.

Market Calendar

• The document includes a market calendar on page 15, which outlines key dates and events affecting market trends and investor behavior.

Summary and Top Picks

• Top-10 Picks are based on valuation and growth forecasts for 2016, including changes in EPS estimates and market cap data.
• Bottom-10 Picks also show EPS forecast changes, highlighting stocks with potential for improvement or decline.

Conclusion

Samsung's strategy emphasizes caution and a defensive approach in the face of macroeconomic uncertainties, suggesting that investors should consider developed markets, large caps, and value stocks over small caps and growth stocks. The Kospi is viewed as a low valuation opportunity in the global context, with sector-specific insights and fund flow analysis supporting the overall market outlook.