"Sleepless Holidays for 'Seohak Ants': Securities Industry Offers Strategies"

# South Korean Stock Market Observes Holiday While U.S. Markets Continue Operations **Retail Investors Zero In on Tesla and Nvidia Amid Extended Holiday Season** **Analysts Advise Caution Due to Trade Policy Uncertainties** [SEOUL=Newsis] Reporter Yeon-Soon Kim – With South Korea’s extended holiday spanning Buddha's Birthday and the Children's Day substitute holiday, the domestic stock market will be closed through May 6. While local markets take a break, U.S. and European stock markets will remain open. This golden holiday period is expected to drive aggressive stock-buying activity from South Korea’s retail investors, often dubbed “Seohak ants.” Historically, these investors have actively traded foreign stocks during holidays. For instance, during the Lunar New Year holiday, Chinese AI startup Deepseek energized the New York Stock Exchange, prompting Korean investors to snap up undervalued U.S. semiconductor shares like Nvidia after significant price drops. # Global Market Interest in Semiconductors Continues According to the Korea Securities Depository, from April 1 to April 30, the most purchased foreign security was the *Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL)*. Net purchases for SOXL were $826.26 million (approximately 1.18 trillion KRW), marking a 55.5% increase from the previous month’s $531.43 million. SOXL tracks the ICE Semiconductor Index, which includes 30 leading semiconductor companies such as Broadcom and Nvidia, tripled. Despite SOXL’s approximately 42% price drop through March this year, investors appear optimistic about a rebound, believing the U.S. trade-tariff tensions have peaked, adopting a bottom-fishing strategy. Additionally, Tesla and Nvidia were significant in net-purchase rankings, ranking second and fourth, respectively. This underscores Seohak ants' sustained interest in U.S. big tech stocks. Observers anticipate that stocks like SOXL, Tesla, Nvidia, and Palantir will remain popular during the extended holiday period. # Trade Policy Risks and Valuation Concerns Highlighted by Analysts The securities industry urges caution amid uncertainties related to tariff policies and vague earnings projections. KB Securities Analyst Kim Se-Hwan remarked, “Tesla’s earnings per share (EPS) is projected to grow at an average annual rate of 22.7% between 2025 and 2027. However, with its 12-month forward price-to-earnings ratio (PER) at 83.4x and price-to-earnings growth ratio (PEG) at 3.7x, Tesla’s valuation is high compared to the broader market and peer companies. Thus, we advocate reducing portfolio weight.” Kim also emphasized the impact of tariffs on Tesla's profitability, particularly tariffs on autos and Chinese-made batteries, as a significant risk. Meanwhile, iM Investment & Securities Analyst Park Yoon-Cheol noted, “Despite weak earnings, Tesla shares have rebounded following Elon Musk’s hint at a potential return to Tesla’s management. To maintain this momentum, the upcoming robotaxi event in June must be successful, alongside increased adoption of Full Self-Driving (FSD) technology by other OEMs. Furthermore, revenue from EV models like the Model Y Juniper and low-cost variants must normalize.” # Broader Market Volatility Under Scrutiny Seohak ants’ persistent interest in Nasdaq-heavyweight companies like Tesla, Nvidia, Apple, and Palantir is clear. However, concerns linger that tariff policies could impact the earnings visibility of major corporations. Hanwha Investment & Securities Analyst Park Seung-Young commented, “Generalized tariffs in the U.S. could obscure companies’ earnings visibility, potentially leading to reduced dividends. Nasdaq-listed firms, facing elevated volatility, are adopting conservative guidance.” # International Markets Remain Open During South Korea’s Holiday South Korean brokerages, including Mirae Asset Securities, Korea Investment & Securities, Samsung Securities, KB Securities, and Kiwoom Securities, will keep their overseas trading desks operational during the holiday, ensuring smooth foreign stock trading. The New York Stock Exchange (NYSE), Nasdaq, and other U.S. markets will operate as usual on May 5 and May 6. However, investors should be aware that some international stock exchanges may close for country-specific holidays. For instance, on May 1, in observance of Labor Day, various markets in Asia (Hong Kong, China, Vietnam, Singapore, Indonesia, and Taiwan) and Europe (Germany and Euronext) were closed. Additionally, China and Vietnam will remain closed on May 2. South Korean brokerage firms aim to facilitate seamless foreign stock orders during the extended holiday, similar to their operations during major holidays like Lunar New Year or Chuseok.