"Don't throw it at the bottom of KOSPI blue-chip stocks." Why domestic stocks should be caught despite the rush to escape from the director.

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: January 7, 2025 (Tuesday)
■ Talk: Lee Won-il, Deputy Director of Woori Bank's Asset Management Consulting Center

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.
◇Jo Tae-hyun: This is the last order of YTN Radio Live Economy Part 2. It's time for the rich. The expert we will meet today will be with Lee Won-il, portfolio manager of Woori Bank's WM Sales Strategy Department. Please come in.

◆Lee Won-il: Yes, hello. It's a great pleasure to meet you.

◇ Cho Tae-hyun: I meet Woori Bank experts every Tuesday, and it's your first time here. What part of your field would you like to introduce?

◆ Won-il Lee: I'd like to tell you something about it recently because I'm working on managing my portfolio rather than specializing in it. There is a phenomenon that a lot of Korean investors leave domestic stocks. You should have already left as a joke, but since I've been leaving these days, I think it's a little late, so I'm going to tell you a little bit about that.

◇ Cho Tae-hyun: Okay. So today, I'm going to talk a little bit about the stock market. Looking at the overall situation, the domestic stock market seems to be strengthening a little bit in the new year. However, considering the situation last year, our stock market last year was very difficult even compared to major countries around the world. How did you like it?

◆Lee Won-il: Global stock market as recently as summer. It's the United States. I followed the U.S. by sympathizing with it a lot, but since then, the global economy has turned upward due to the signal that the semiconductor economy will be a little bad in Korea, and Taiwan and Japan have even risen. Only Korea recorded minus 10 percent of KOSPI, and many investors were disappointed as Korea recorded losses in the second half of last year, and many people seem to be moving out of Korea to the U.S.

◇ Cho Tae-hyun: So it's a little rude to escape from the director, but it's intelligent. The domestic market was so bad that it probably came up with such a story. There seems to be a lot of disagreement about the situation this year. Compared to domestic growth, do you think the U.S. market will continue to be strong this year?

◆ Won-il Lee: Yes, the view of the domestic market is a little mixed, but I'm actually seeing the view of the US market as one way. Looking at the reports coming out now, the U.S. will start around 4800 at the end of 2023,

◇ Cho Tae-hyun: Are you talking about S&P500?

◆ Lee Won-il: That's right. So, as it went up to 5900 points, it went up by about 22 to 3%. Now, the view of the United States in 2025 is quite hot. Now, there is a view that it will go up by about 20% from 5900 to 7000. On average, it is expected to go up by more than 10%. I think the houses that are very conservative will also go up at least 4-5%. Then, I think it would be right to invest in the United States because I've been running well for the past two to three years, and I think it's right to invest in the United States. I want to tell you one thing. About a month ago, we had a very big political event in Korea, and when you look at the market, a very negative event occurred, and it has been maintained until now. The U.S. won the election with Trump's landslide victory before that, and there are many expectations for Trump in the market now. Then, in this situation, if you look at the KOSPI and S&P during the month of December, where did you do better?

◇ Cho Tae-hyun: Good defense? I think it depends on the perspective, so please tell me your answer.

◆ Lee Won-il: Then many people think that the U.S. continued to rise in December. Korea may have fallen a lot in the aftermath of martial law, but both yields fell slightly in December, but the KOSPI is better.

◇ Cho Tae-hyun: Is it less?

◆ Lee Won-il: If you look at it, I think it's been a long time since we had political events and the exchange rate was the highest since the financial crisis. And I think the stock price must have fallen out a lot, but it's not as much as I thought. The same goes for KOSDAQ, but KOSDAQ is a very volatile composite stock index, and the stock price at the end of November and the second decimal place are the same. Then it's not missing at all. Unlike what I thought, the domestic market was holding up.

◇ Cho Tae-hyun: That's unexpected. At that time, I felt that the domestic market crashed after the martial law crisis, but it didn't fall as much as I thought. Rather, it is a result that can be said to have been good, but why did that result come out?

◆ Lee Won-il: So the reason I've talked about this a little bit longer is because of this, but in Korea, stocks tend to move on a shelf rather than the economy or indicators. Since the summer, the nation's stock prices have begun to adjust considerably first as profit estimates have fallen as profit growth in fairly economy-sensitive sectors has fallen,

◇ Cho Tae-hyun: So the stock price fell out first because you thought the performance would be bad?

◆ Lee Won-il: That's right. At the same time, the stock price plummeted below a certain band, so the room itself that could be left out more easily became very narrow. As a result, even though there are very big bad news, the stock price rebounds when a little bit of good news occurs. So recently this year, the stock price has been rising almost 4-5% based on the KOSPI, but there were no events. So what I want to say now is that there have been two impeachment prosecutions over the past few decades, one for the People's Party, one for the People's Power, one for the Democratic Party, and one for the dismissal. However, if you look at the results of such a political event, it eventually continued to rise in the rising market and fell again in the falling market. If so, I would like to say that there is no need to discard domestic stocks at the current valuation if an event occurs and we get a big adjustment.

◇ Cho Tae-hyun: Rather, the domestic stock market may be better off to expect some kind of profitability. That's also the overall valuation, so the price seems to have the biggest impact.

◆Wonil Lee: The first one is correct. It's the first one. Korea is the first country, and if you look at the valuation indicators we often talk about now, PBR or PER may have changed a little over the past few days than I prepared, but it is still at the level of economic crisis anyway. When you get to this level and you look at the movement a few months after that, historically, it's always been a rebound. So I don't know how much longer the martial law situation in Korea will be. However, if the stock price is adjusted for a more negative event, I think it's an opportunity to buy in installments. I hope we don't have to worry about the stocks that our listeners have now, especially if they are good profit growth and fairly good stocks, and if they are good stocks, they don't make a mistake of throwing precious assets at a much adjusted low price.

◇ Cho Tae-hyun: Okay. As expected, it can be said that the domestic stock market is at a time when its price appeal is very prominent. One thing to look at here is that you mentioned the US stock market earlier, but as the US stock market is rising so much, some say that it is a bit overvalued or overvalued. Then, what do you think about the possibility of getting some adjustments this year?

◆ Lee Won-il: I want to say this. The U.S. is running for a long time now, but energy is still being replenished. In the short term, we don't see an environment that will break the momentum of the United States in the very short term. Because Europe and Japan, which are in the peer group, are inferior to the U.S., and the U.S. is the most supportive of the core industries of the industry that will lead the future, we cannot deny that we are going to a certain level of bubble in the short term. The value of the US is the highest since the IT bubble. That's why in order for this valuation to continue, stock prices must fall out or profits must increase sharply, but profit growth has not been keeping up with the rise in stock prices. Then, people who enjoy this momentum in the short term, but now invest in the United States, the return is quite large. Then, I think it's right to take this with you in the first half of this year as a section where you keep collecting profits. If the U.S. receives an adjustment in a short period of time, so if the momentum is dampened, it is not a low-priced purchase, but a section where the momentum disappears a little, so in that case, let's reduce the weight little by little. So instead of increasing the U.S. this year, of course, it could go up more in price now, but now it's a profit-making segment.

◇ Cho Tae-hyun: It should be viewed as a profit-making part, and instead of going further into the current market, how much weight do you think is appropriate when we say, "What weight do you think we should put on the domestic and overseas markets?"

◆ Lee Won-il: Yes, actually, that's because individual risk tendencies are much more important now. I'm sure the reporters and I have different risk tendencies, so I operate very aggressively. But I can tell you this, basically, I told you about the United States with a little negative nuance, but the key to our bank's portfolio is the United States. The U.S. is still the largest. Korea only accounts for half of that. And this is the same with the National Pension Service, but if I remember correctly, the proportion of global stocks has increased more than twice that of Korea. In conclusion, in the short term, Korea has been adjusted, so you'll take the weight, but if I maintain a large portfolio for the next year or two, the weight of stocks and bonds will now vary depending on individual risk tendencies, but the key is to take the U.S. and change the market, for example, when the U.S. becomes expensive or Korea becomes cheaper, I want to tell you how to adjust the weight a little tactically. If I just say it in numbers, I'm still taking about 30% of bonds. The bond yield has been a little bad lately. Conversely, you're taking 60 to 65% of the stock, almost 50% of which was the U.S., but you've been gradually reducing the U.S. share recently.

◇ Cho Tae-hyun: Okay. I think reducing the weight is also linked to what you said earlier. So far, we have talked about various things with Lee Won-il, portfolio manager of Woori Bank's WM sales strategy department. Thank you for talking today.

◆Wonil Lee: Thank you.

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