▲AI PRISM* Customized Economic Briefing
*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "artificial intelligence (AI)-based customized news recommendation and summary service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.
[Key Issue Briefing]
■ US-Iran Clashes Resume: Middle East tensions rose sharply as the United States completed a second round of airstrikes on about 90 Iranian military facilities and Iran again struck US bases in Kuwait and Bahrain. Following the signing of a ceasefire memorandum of understanding (MOU), the conflict over control of shipping lanes in the Strait of Hormuz has escalated into armed clashes, while inside Iran the divide between the negotiation faction and hardliners is deepening.
■ Fed Inflation Warning: In the minutes of the US Federal Reserve's June Federal Open Market Committee (FOMC) meeting, a minority of members said the possibility of raising the base rate should be kept open, citing the fallout from the Middle East war, expanded artificial intelligence (AI) investment, and tariff increases. Most members judged that upside risks to inflation remain stubborn, concluding that if the upside scenario materializes, some degree of tightening would likely be needed.
■ Global T+1 Transition: With the UK, the European Union (EU), and Switzerland set to adopt T+1 settlement (one business day from the purchase date) in October next year, and Hong Kong pushing for the fourth quarter of next year, T+1 systems are expected to apply to 90% of global stock market capitalization in the second half of next year. Korea lacks a T+1 transition roadmap, and with the Korea Exchange's pre-market opening also postponed to the end of next year, concerns are growing that the country could fall behind in the global capital market infrastructure competition.
[News of Interest to Global Investors]
1. US and Iran Trade Blows for Second Day, Ultimately a Fight Over Sea Lane Control
- Key Summary: The US Central Command completed a second round of airstrikes on the 8th, striking about 90 military targets along Iran's coastline, including air defense systems, coastal surveillance assets, and missile and drone storage sites. Iran's Islamic Revolutionary Guard Corps (IRGC) responded by again striking US bases in Kuwait and Bahrain, and an Iranian military official warned that it could launch a large-scale attack on US bases in the Middle East. US President Donald Trump drew a line, saying, "This is not a resumption of all-out war," while expressing a firm resolve to respond, accusing Iran of violating the ceasefire memorandum of understanding (MOU). Meanwhile, inside Iran the divide between the negotiation faction and hardliners is deepening, with Iranian Foreign Minister Abbas Araghchi, a leading figure of the negotiation faction, being pelted with stones by a crowd of hardliners.
2. Fed Warns of Inflation Risks; Minority of Members Also Mention Rate Hike
- Key Summary: In the minutes of the June Federal Open Market Committee (FOMC) meeting released by the US Federal Reserve, a near-minority of members said it was necessary to consider raising the base rate in light of the fallout from the Middle East war. While most members said concerns about a weak labor market had eased somewhat, they judged that upside risks to inflation remain stubborn, presenting an analysis that expanded artificial intelligence (AI) investment and tariff increases could keep price pressures at a high level. The minutes stated that "if the upside scenario materializes, almost all participants judged that some degree of tightening would likely be needed." However, they also added the caveat that if price pressures ease, it would be appropriate to keep rates at the current level or turn toward cuts.
- Key Summary: The UK, the European Union (EU), and Switzerland will shorten their stock settlement cycle from the current T+2 (two business days from the purchase date) to T+1 starting in October next year, and Hong Kong is also pushing to adopt it in the fourth quarter of next year, so T+1 systems are expected to apply to 90% of global stock market capitalization in the second half of next year. A London Stock Exchange Group (LSEG) official said trading-hour extensions and the T+1 transition could be pursued separately, leaving open the possibility of introducing 24-hour trading, while the Hong Kong Exchange (HKEX) explained that if Asian markets stick with T+2, investors would face increased burdens for additional funding and higher costs. By contrast, Korea has no T+1 transition plan or concrete roadmap, and the Korea Exchange's 7 a.m. pre-market opening has been postponed from September this year to the end of next year. Kim Min-seok, head of Korea Investment & Securities' London office, said that while European institutional investors expressed regret that they had "missed the timing to invest" amid Korea's stock market surge, institutions that prioritize long-term investment place greater importance on companies' fundamental growth potential and efforts to enhance corporate value.
[News for Global Investors' Reference]
4. "AI Investment Doubts and Frequent Volatility Maximize Fatigue; 7,000 Is the Support Line"
- Key Summary: With KOSPI falling nearly 20% from its peak, an analysis has emerged that expectations for artificial intelligence (AI) investment and the semiconductor industry have entered a phase of reassessment. Research heads at major securities firms diagnosed that a combination of factors was at play: growing doubts about the sustainability of AI capital expenditure (CAPEX) and semiconductor profit growth rates, amplified volatility of single-stock leveraged exchange-traded funds (ETFs), and geopolitical uncertainty related to Iran. KOSPI closed at 7,291.91 on the 9th, but market confidence was shaken as individual investors net sold 1.2673 trillion won. Experts presented the KOSPI 7,000 level as a psychological support line, forecasting that earnings announcements by US big tech and semiconductor companies in late July will be a key event to reconfirm AI investment demand.
- Key Summary: Samsung Electronics (005930.KS) and SK hynix (000660.KS), along with related single-stock leveraged and inverse products, accounted for 83.1% of trading value on the domestic stock market, pushing the concentration in semiconductor leading stocks to an extreme. On May 26, before the introduction of single-stock leveraged products, the two stocks accounted for 30%, but this surged to 51% in a month and a half, reaching 83.1% when the trading value of 16 leveraged and inverse products is included. The Bank of Korea warned that with the two stocks' market capitalization and trading share exceeding half the market, the expansion of single-stock leverage could deepen the concentration, and the Financial Supervisory Service also decided to continuously monitor the market impact of single-stock leverage. In addition, in the recent correction phase, sectors with strong earnings momentum such as banks, cosmetics, and retail have held up well, showing signs that the concentration may ease somewhat.
6. Victory Giant Benefits From AI Server Board Shortage
- Key Summary: China's Victory Giant is a company that has secured a key position in Nvidia's AI server supply chain in the printed circuit board (PCB) field, including high-density interconnect (HDI) and high-layer-count (HLC) boards, and is estimated to have raised its PCB market share for mainboards and switch boards on the Blackwell (GB200) platform to the 50-60% level. As AI server specifications advance, the PCB value per server rack (a stand holding server equipment) is soaring, rising from about $2,500 for the H100 system to about $20,000 for the GB200, with some forecasts that the Rubin Ultra system could rise to as much as $100,000 or more per rack. Building production bases in Thailand and Vietnam centered on its Huizhou plant in China, overseas sales account for 76.8%, and the company plans to invest the HK$23.1 billion raised through its dual listing in Hong Kong in April this year into next-generation AI PCB facilities. AI and high-performance computing (HPC) sales are expected to expand to 65-75% in 2026-2027, and analysts say that if expanding demand for AI server boards combines with the scarcity of Hong Kong H-shares (shares of Chinese companies listed in Hong Kong), a re-rating of its valuation could follow.
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