Rate-Hike Odds Near 60% in U.S., Hitting Biotech and Brokerage Stocks

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

1. Foreign Investors Exit and Trading Value Hits Yearly Low as Rate-Sensitive Biotech and Brokerage Stocks Take Direct Hit

Key summary: After Warsh's remarks pushed the probability of a September rate hike to 59.7%, rate-sensitive sectors fell across the board, with Alteogen down 3.91%, ABL Bio down 5.46% and Mirae Asset Securities down 4.01%. Average daily trading volume in August was 321.43 million shares, down 70.9% from 1.11 billion shares in March, and on August 24 volume hit a yearly low of 267.73 million shares. Foreign investors were net sellers of 10.17 trillion won worth of shares in August, following 9.86 trillion won in July, extending their selling streak to a fourth month since May, while institutions dumped 5.07 trillion won worth in August. Shin Joong-ho, head of the research center at LS Securities, said a rapid stabilization of market rates would be hard to expect even if policy rates were held, and assessed that risks of an economic slowdown were mounting.

2. U.S. 30-Year Treasury Yield Holds Above 5% for 55 Sessions, Longest Since 2006

Key summary: The U.S. 30-year Treasury yield topped 5.275%, holding above 5% for a 55th trading session, the longest run since 2006, while the 10-year yield reached 4.780%, the highest since January 2025. At a Group of 20 finance ministers' meeting, Bessent said growth was the only way out of the debt, signaling he would stick to a growth strategy rather than fiscal tightening, which fueled Treasury selling. President Donald Trump said current U.S. interest rates were too high, effectively pressing for cuts, but Bloomberg reported that long-term Treasury yields could rise further if Warsh hesitates to raise rates. Euro zone consumer price inflation also came in at 3.3% in August, the highest since September 2023, raising the likelihood of an additional European Central Bank rate increase, in what analysts described as a simultaneous strengthening of global tightening.

3. China's CXMT Begins Small-Scale Production of Fifth-Generation HBM as Alibaba Affiliates Test Adoption

Key summary: CXMT has begun small-scale production of HBM3E, a step that analysts say narrows its generational gap with the memory big three of Samsung Electronics, SK hynix and Micron by one notch. T-Head and Cambricon Technologies, both under Alibaba, are testing CXMT's HBM3E in their own processors, and if plans hold, related products could be supplied to China's AI data center market early next year. CXMT intends to channel the $8.6 billion, or about 11.8 trillion won, raised through its Shanghai listing into capacity expansion, but it faces restrictions on purchases of advanced foreign equipment and low yields, leaving the gap with leading firms at a reported three to five years. Samsung Electronics, SK hynix and Micron have already started supplying HBM4E samples, a generation ahead, maintaining their technological edge, analysts said.

4. Share Buybacks by Samsung and SK hynix Act as KOSPI Defense Line as Other Corporations Buy 1.6 Trillion Won

Key summary: Retail, foreign and institutional investors were all net sellers, but on-market buybacks by Samsung Electronics, of 2 million shares, and SK hynix, of 650,000 shares, supported the downside, and the KOSPI closed up 15.78 points, or 0.23%, at 6,835.8. Other corporations bought a net 1.67 trillion won worth of shares that day, and since SK hynix began its buyback on the 20th of last month they have posted daily net purchases of 1.5 trillion to 1.6 trillion won for seven consecutive sessions. The KOSDAQ, which had no buyer to absorb institutional selling, ended down 13.04 points, or 1.56%, at 821.25, with EcoPro falling 4.49%, HLB 4.35% and Peptron 9.66%. Shin Seung-jin, head of the investment information team at Samsung Securities, said buybacks could support the downside but that a gradual rise was expected rather than the sharp gains seen in the first half.

5. Bond-Mixed ETFs Top 20 Trillion Won as Pension Demand Drives Growth

Key summary: Net assets of domestic bond-mixed exchange-traded funds stood at 20.58 trillion won as of the 31st of last month, topping 20 trillion won for the first time and up 156.5% from 8.02 trillion won at the end of last year. Under current rules, defined contribution and individual retirement pension accounts may invest only up to 70% of reserves in risk assets such as equity ETFs, but bond-mixed funds with equity weightings of 50% or less are classified as safe assets and can be bought without limit, drawing heavy pension inflows. The product lineup has also expanded beyond the KOSPI 200 and S&P 500 into semiconductors, the Hyundai Motor Group, space technology and gold and silver, and the RISE Samsung Electronics SK hynix Bond Mixed 50 fund, listed this year, has surpassed 4 trillion won in net assets. Han Su-jin, an analyst at Samsung Securities, said demand from retirement pension investors seeking to hold equity exposure while reducing volatility was driving the market's growth.

6. DB HiTek Sits on 1.2 Trillion Won in Cash but Holds Back on Power Semiconductor Expansion

Key summary: DB HiTek posted revenue of 774 billion won and operating profit of 172.1 billion won in the first half, up 21.9% and 36.2% respectively from a year earlier, but average utilization at its Bucheon and Eumseong campuses reached 94.9%, making new capacity urgent. Despite holding current assets of 1.2287 trillion won, management has been reluctant to commit to an expansion of about 1.5 trillion won, instead proposing a government-led public mass-production fab as an alternative, drawing criticism from the industry. Most of the current assets are tied up in financial products such as money market funds and money market wrap accounts, and 65.2% of revenue comes from China, leaving geopolitical risk as a latent variable. With funding from the National Growth Fund on hold because of legal risk surrounding founder and Chairman Kim Joon-ki, and losses from a suspension of DB Metal's operations added on, analysts say market doubts about the company's willingness to invest are growing.

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