Why the KOSPI Is Vulnerable to U.S. Interest Rate Hikes
Industry weights of the KOSPI 200
Samsung Electronics 2021 results by business division
Korea's top stocks by market capitalization are mainly concentrated in semiconductors. Samsung Electronics, which has the largest weight, also has home appliance and mobile business divisions, but much of its revenue is concentrated in semiconductors. In addition, there are LG Energy Solution, Samsung Biologics, Hyundai and Kia, and POSCO Holdings, which have high overseas revenue shares.
Diagram of Japan's top companies by market capitalization
This is in relatively stark contrast to Japan, which has many consumer discretionary companies. The weaker a brand's pricing power, the more vulnerable it is to inflation. However, the revenue of Korea's major companies is mainly driven by B2B and price competitiveness, and is heavily dependent on the global infrastructure investment trend.
Unlike in the United States, the G20 leading economic index should be given more weight than domestic demand or the unemployment rate when evaluating corporate earnings in Korea, because many companies are export-based.
In addition, Korea's export dependence is very high compared with major countries.
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