▲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 summarization service developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.
[Key Issue Briefing]
■ Memory Bottom Call: As the KOSPI fell to the 6,000 range, global investment banks successively raised calls that the market has bottomed. With memory prices surging and leveraged positions being liquidated, expectations are growing for a renewed semiconductor rally.
■ Deepening Yen Weakness: As the yen's value fell to its lowest level in 40 years, the Bank of Japan is reportedly considering ways to accelerate its rate hikes. With an expansionary fiscal stance and dollar strength stemming from the Middle East overlapping, the yen's weakness is showing little sign of easing.
■ Lending Shutdown: As IBK halted new variable-rate mortgage lending across its nationwide branches, a lending cliff is spreading across the board. Following commercial banks, even state-run banks are now raising lending barriers in line with volume regulations.
[News of Interest to Financial Product Investors]
1. Wall Street Floats Korean Market Bottom Call...Semiconductor Selloff to Stop
- Key Summary: As the KOSPI fell to the 6,000 range, global investment banks unanimously raised calls that the market has bottomed. Morgan Stanley diagnosed the recent price correction as a buying opportunity and maintained its KOSPI target of 9,000, while JP Morgan maintained its target of 12,500. With server DRAM spot prices surging up to 146% compared to late June and leveraged exchange-traded fund (ETF) liquidations about 75% complete, signs of a supply-demand reversal are becoming clear. Earnings announcements later this month from Intel, SK hynix (000660), Samsung Electronics (005930), and Amazon are expected to be a watershed for reigniting the rally.
- Key Summary: In the MSCI August regular review to be announced on the 13th of next month, LG Innotek was found to have the highest probability of inclusion. Samsung Securities (016360) estimated that inclusion of LG Innotek would draw about 313 billion won in passive funds. On the other hand, observations suggest HLB, POSCO International (047050), Samsung Epis Holdings (0126Z0), and LG Display (034220) are likely to be excluded due to falling short of market capitalization or free-float market capitalization thresholds. This review draws attention as it marks the first regular change to which MSCI's revised new index calculation rules are applied.
3. With Yen at 40-Year Low, BOJ Considers Accelerating Rate Hikes
- Key Summary: As the yen's value fell to its lowest level in 40 years, the Bank of Japan is reportedly considering ways to accelerate its base rate hikes. The Bank of Japan raised its rate last month to 1%, the highest in 31 years, and has since signaled additional hikes. The yen entered the 163-per-dollar range that day, marking its lowest level since December 1986, in what is interpreted as the result of overlapping expansionary fiscal stance and dollar buying driven by instability in the Middle East. Japanese Finance Minister Satsuki Katayama expressed a position that she would respond decisively at any time if necessary, but the yen's weakness showed no sign of easing.
[News for Reference by Financial Product Investors]
4. 3.4 Trillion Won Net Buying Over 3 Trading Days...Is Foreign Rebalancing Over?
- Key Summary: Foreign investors, centering on semiconductor stocks that had seen large corrections recently, engaged in bargain hunting and continued net buying on the stock market for a third consecutive trading day. Foreigners net bought 2.6223 trillion won in a single day, supporting the index, and cumulative net buying over three trading days reached 3.4573 trillion won. Buying was concentrated in large-cap semiconductor stocks such as SK hynix and Samsung Electronics, and the KOSPI closed at 6,797.70, up 0.74% that day. However, since foreigners have net sold 157.7434 trillion won so far this year, some analysts say it is too early to conclude that a trend-based supply-demand return has occurred.
5. [Exclusive] IBK Halts Variable-Rate Mortgages...Lending 'Shutdown' Spreads Across the Board
- Key Summary: As IBK halted new variable-rate mortgage lending across its nationwide branches, a lending shutdown is spreading across the board. This is interpreted as a measure driven by volume regulations, as the household loan increase at the five major banks exceeded their annual targets. Earlier, KB Kookmin Bank limited its mortgage ceiling to 300 million won, Woori Bank reduced its monthly handling limit per branch from 3 billion won to 1 billion won, and SC First Bank has halted new applications altogether. The Financial Services Commission plans to review whether to ease regulations based on discussions at the real estate grand debate held on the 23rd, but assessments suggest its room to maneuver is not large.
6. Hit Hard by China Oversupply...Petrochemical Industry Credit Ratings Cut in Succession
- Key Summary: As oversupply stemming from China and worsening profitability drag on, credit ratings of domestic petrochemical companies are falling in succession. Three domestic credit rating agencies downgraded the credit ratings or long-term outlooks of five companies in the petrochemical sector in their regular assessments in the first half of this year, with LG Chem (051910) and Lotte Chemical (011170) among those affected. This is interpreted as the result of China's facility expansion and a business structure centered on commodity products, which has shrunk the export market and kept product spreads weak, increasing financial burdens. The government's push to restructure the Daesan and Yeosu industrial complexes is expected to serve to stabilize financial structures through measures such as extending debt maturities, rather than to improve earnings.
▶Go to article: Delinquency Rate for SMEs Hits 1%, Highest in 11 Years as Rates Rise
▶Go to article: IBK Halts Variable-Rate Mortgages...Lending 'Shutdown' Spreads Across the Board
▶Go to article: Hit Hard by China Oversupply...Petrochemical Industry Credit Ratings Cut in Succession
