"Samsung, SK Still Undervalued": KOSPI ETF Launches in Hong Kong

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "AI-based personalized news recommendation and summarization service" developed with support from the Korea Press Foundation. It selects and provides six customized news items tailored to each reader type.

1. "Samsung, hynix Still Undervalued": Hong Kong Widens Investment Stride on Semiconductor Optimism

- Key Summary: Hong Kong asset manager CSOP Asset Management grew its SK hynix single-stock leverage ETF to 16.8 billion dollars (about 25.8 trillion won) in assets under management, the world's largest, and then last month listed Hong Kong's first KOSPI 200 ETF. Lee Wang, CSOP Asset Management's chief investment officer (CIO), said, "Samsung Electronics and SK hynix are still undervalued compared to their U.S. peers." As the spread of AI agents increases token usage, memory chip demand is expanding, and CSOP is also focusing on power equipment, energy infrastructure, and the shipbuilding and defense sectors as beneficiaries of AI investment. The KOSPI 200 ETF has an information technology (IT) sector weighting of about 66%, with Samsung Electronics and SK hynix alone accounting for about 60%, making it effectively a product that invests in Korea's AI industry.

2. Will Samsung Electronics' Operating Profit Top 100 Trillion Won? Global No. 1 in Sight

- Key Summary: According to financial information provider FnGuide, Samsung Electronics' second-quarter operating profit consensus (the average of securities firms' estimates) stands at 85.1766 trillion won, exceeding the highest quarterly operating profit record for a global tech company held by Nvidia at about 81.85 trillion won. Samsung Electronics' DRAM output of 650,000 to 700,000 wafers per month is more than double that of third-ranked Micron (300,000 per month), securing supply leadership. The industry analyzes that on a basis prior to reflecting estimated planned performance bonuses as provisions, actual quarterly operating profit has already surpassed 100 trillion won. However, due to the surge in memory prices, the finished-products (DX) division is expected to swing to a loss in the second quarter, and the possibility of a price increase for the Galaxy Z Fold8 has also been raised.

3. SK hynix to List U.S. ADR on the 10th; IMF Korea Growth Rate in Focus

- Key Summary: This week, Samsung Electronics' second-quarter preliminary earnings (the 7th), the International Monetary Fund's (IMF) "July World Economic Outlook" (the 8th), and SK hynix's U.S. American Depositary Receipt (ADR) listing (the 10th) are cited as major events that will affect the domestic stock market and exchange rate. The IMF forecast Korea's real gross domestic product (GDP) growth rate for this year at 1.9% last April, but with the surge in first-quarter growth and record-high semiconductor exports continuing, a significant upward revision is expected this time. The Bank of Korea and the Organization for Economic Cooperation and Development (OECD) have already raised their forecasts to 2.6%, and some foreign research institutions have presented figures as high as 4%. In addition, the Seoul foreign exchange market will transition to a 24-hour system starting the 6th, and it is a time to check the direction of monetary policy under Federal Reserve Chair Kevin Warsh through the minutes of the U.S. June Federal Open Market Committee (FOMC) meeting.

4. As a Safety Net in a Seesaw Market: Big Money Flows into Covered Call ETFs

- Key Summary: Amid expanding volatility in the domestic stock market, individual funds are flowing heavily into covered call ETFs. Samsung Asset Management's "KODEX 200 Target Weekly Covered Call" has seen individual net purchases of 2.0199 trillion won since the start of the year, surpassing 6 trillion won in net assets, and is being managed with a target distribution of around 17% per year. Recent products have evolved to adopt a structure that raises participation in stock price gains while using premiums secured through call option selling as a source for monthly distributions. Option premium income is tax-exempt when distributed and is not included in the comprehensive financial income taxation, drawing increasing interest from high-net-worth individuals and pension investors.

5. Single-Stock Leverage Drives Record Deviation Disclosures: 1,299 Cases in June Alone

- Key Summary: ETF deviation excess disclosures last month totaled 1,299 cases, up 88.8% from March (688 cases), the previous monthly record high, marking an all-time high. Deviation is an indicator showing the gap between an ETF's market price and net asset value (iNAV), and when deviation widens, the risk of investors buying an ETF above its actual value or selling below it increases. The widening volatility in large semiconductor stocks following the late-May listing of Samsung Electronics and SK hynix single-stock leverage ETFs was the main cause, with leverage ETF-related disclosures being the most at 224 cases, followed by AI-related ETFs at 207 cases and semiconductor ETFs at 164 cases. Experts advise that since it is difficult to completely prevent deviation from occurring, investor caution along with strengthening the market-making function of liquidity providers (LP) is necessary.

6. Round-the-Clock FX Trading, But Concerns of a Half Measure: Won's Appeal Must Rise First

- Key Summary: The Seoul foreign exchange market transitioned to a five-day, 24-hour system starting the 6th, but a Seoul Economic Daily analysis found that 77.3% of won-dollar trading in June was concentrated in the existing Seoul session hours (9 a.m. to 3:30 p.m.). The 24-hour opening was pursued as a prerequisite for inclusion in the Morgan Stanley Capital International (MSCI) developed markets index, but critics point out that unless won liquidity is supported during nighttime hours, the effect of increased trading volume will be limited. Lee Seung-heon, an economics professor at Soongsil University, said, "Foreign financial institutions must be able to borrow and settle won in a timely manner during New York and London hours for actual trading to become active." The assessment is that won trading can substantially increase only if structural challenges such as resolving the Korea discount, improving corporate governance, and revising tax laws are addressed.