[Seoul Market Wrap] KOSPI Recovers 5,800 Mark as Institutions Scoop Up $12.33 Billion

South Korean Markets Surge on Semiconductor Strength and Value Buying

The domestic stock market saw a strong performance on Tuesday, with both the KOSPI and KOSDAQ indices climbing. Despite concerns over the profitability and sustainability of the AI industry, robust semiconductor exports and reduced valuation pressures from falling stock prices supported investor sentiment. Institutional buying power drove the KOSPI above the 5,800 mark, while the KOSDAQ rebounded after three consecutive days of decline.

According to the Korea Exchange, the KOSPI closed at 5,859.08, up 128.34 points (2.24%) from the previous trading day. The KOSDAQ finished at 734.36, a rise of 9.98 points (1.38%). The won-dollar exchange rate ended the week at 1,343.8 won per dollar, up 9.5 won from the previous trading day.

The KOSPI opened in negative territory due to worries about the overall profitability and investment sustainability of the AI industry. However, it reversed course and climbed, led by the electric and electronics sectors, as domestic semiconductor exports remained strong and valuation concerns eased. This attracted institutional buying at lower price levels.

Market Performance by Sector

Construction led the charge with a robust 5.8% gain, followed by Transportation & Warehousing at 5.3%, and Transportation Equipment & Parts with a solid 3.7% increase. Machinery & Equipment also performed well, rising by 3.1%. Large-cap stocks saw a 2.3% uplift, while mid and small-caps rose by 2.0% and 1.7%, respectively.

Flow of Funds

Institutional investors were net buyers, scooping up $1.23 billion worth of shares, while foreign investors and individuals were net sellers, offloading $369 million and $1.35 billion, respectively. Foreign Investors focused their selling pressure on the Electrical & Electronics sector, disposing of $319 million, and the Financials sector, with $89 million in sales.

KOSDAQ's Rebound

The KOSDAQ index started the week on a weaker note due to concerns over the U.S. tech sector's performance, but quickly rebounded, led by the Machinery & Equipment and Metals sectors. Metals gained 4.1%, Transportation & Warehousing added 3.1%, and Chemicals rose by 2.6%. Institutions were net buyers to the tune of $62 million, while Foreign Investors and individuals were net sellers, with $32 million and $26 million in sales, respectively.

Mergers, Tender Offers, and Low PBR Stocks Soar

Samteo (007540) and Samteo Food (248170) saw their shares surge, with gains of 29.91% and 29.86%, respectively, after announcing a decision to merge their parent companies. Both stocks hit their daily limit up, demonstrating the market's enthusiasm for consolidation plays and low PBR (price-to-book ratio) opportunities.

Market Movers and Sector Strengths

KISCO Holdings (001940) saw a remarkable surge of 19.92%, driven by the news of its subsidiary, Korea Iron & Steel's, plans to become a wholly-owned subsidiary. Korea Iron & Steel (104700) also experienced a sharp rise of 23.68% due to the announcement of a tender offer for its delisting.

Hanjin Kal (180640) benefited from speculation surrounding Ho Ban Group's potential acquisition of a controlling stake, resulting in an 8.80% increase.

The Korea Exchange's disclosure of a list of low PBR (price-to-book ratio) companies led to a boost in related stocks. Hyundai Steel (004020) soared by 11.61%, while Mobase (101330) followed with a gain of 7.97%.

Seokhui Construction (035890) announced a comprehensive plan to enhance shareholder value, including an expansion of dividends and the repurchase of all remaining treasury shares, leading to a 5.72% surge.

Shipbuilding and Power Equipment Sector Strength

Shipbuilding-related stocks rose in unison, driven by global shipping order expansion and improved market sentiment. HD Hyundai Marine Engine (071970) led the charge with a 16.74% increase, followed by Hyundai Hims (460930) at 11.03%, and Hanwha Engine (082740) with a 9.18% gain.

Market Movers: Late-Session Selling Pressure and Margin Call Liquidations

### Hanwha Ocean (042660)

Hanwha Ocean witnessed a remarkable surge of 9.80% following the announcement of its successful localization of the key submarine equipment, the horizontal launch system.

### Hyosung Heavy Industries (298040)

Hyosung Heavy Industries experienced a boost of 13.32%, driven by the expansion of its North American ultra-high voltage power equipment orders and expectations of improved quarterly performance.

### CS Wind (112610)

CS Wind saw a notable rise of 7.31% after disclosing a contract with German firm Siemens Gamesa for the supply of wind towers worth approximately KRW 831 billion to the UK market.

### GS Construction (006360)

GS Construction soared by 10.00%, attributed to the improved profitability in its architecture and housing sectors, as well as forecasts of a recovery in its performance next year.

### P&S Robotics (460940)

P&S Robotics recorded an impressive 29.86% increase, reaching the daily limit, fueled by expectations of expanding its rehabilitation robot business.

### Yeonggwang (359410)

Yeonggwang, newly listed on KOSDAQ, witnessed a surge of 26.47% compared to its IPO price of KRW 17,000. The company, specializing in producing ship engine room modules and plant equipment, gained attention due to the improved shipbuilding industry and expectations of growth stemming from expanded production facilities.

Late-session Selling Pressure Weighs on Stocks

HL Mando (204320) saw its shares decline by 5.53% amid disappointing third-quarter earnings. SOOP (067160) experienced a sharp drop of 11.32%, as its third-quarter operating profit fell 59.9% year-over-year to KRW 14.5 billion, missing market expectations.

Kiwoom Securities (039490) also suffered a decline of 6.38% due to its underwhelming third-quarter performance.