KOSPI Nears 7,000 as Samsung, SK hynix Surge; Goldman Sees 12,000

* 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 provides six news items tailored to each reader type.

1. Chip Surge Puts KOSPI Within Reach of 7,000; Goldman Sees 12,000

- Key points: The KOSPI closed on the 7th at 6,995.39, up 308.18 points, or 4.61%, from the previous session, its highest level since the July 23 close of 7,096.89. Samsung Electronics finished 5.68% higher at 270,000 won, while SK hynix surged 8.26% to 1.783 million won. Gains spread to materials, parts and equipment names including Doosan Tesna (131970), up 11.31%, and Psk Holdings (031980), up 8.33%. Foreign and institutional investors bought a net 2.5525 trillion won and 2.6398 trillion won, respectively, while retail investors sold a net 6.8274 trillion won, the second-largest amount on record. Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, said the market is underestimating how long the current earnings cycle will last and maintained his KOSPI target of 12,000 points.

2. [Exclusive] Top 4 Life Insurers Cut Government Bond Investments by 14 Trillion Won This Year

- Key points: Combined holdings of government and public bonds at four major life insurers — Samsung Life Insurance (032830), Hanwha Life Insurance (088350), Kyobo Life Insurance and Shinhan Life — stood at 151.3175 trillion won at the end of June, down 13.8633 trillion won from the end of last year. Over the same period, their equity holdings more than doubled to 189.9461 trillion won from 81.594 trillion won at the end of last year. The shift was also influenced by the Financial Services Commission, which eased rules on equity and stake investments by insurers in April and said it expected as much as 24.2 trillion won to flow to companies. The yield on 10-year Korea Treasury bonds rose about 1 percentage point to 4.36% on the 4th from 3.385% at the end of last year. Rena Kwok, an analyst at Bloomberg Intelligence, said insurers would tighten management of long-dated holdings out of concern over valuation losses if long-term yields rise further.

3. Expanded Buybacks and 10-Year Auction Leave U.S. Treasury Yields on Edge

- Key points: Bank of America forecast U.S. investment-grade corporate bond issuance of $190 billion (about 256 trillion won) in September, which would be the second-largest for the month on record, while a Bloomberg dealer survey pointed to $215 billion. The U.S. Treasury will auction $39 billion of 10-year notes on the 9th while doubling its long-dated buyback size to $4 billion per operation from $2 billion, and will also issue $22 billion of 30-year bonds on the 10th. The administration of U.S. President Donald Trump has pledged to cut the fiscal deficit to 3% of gross domestic product during its term, but its reciprocal tariffs were ruled unlawful by the Supreme Court and spending cuts by the Department of Government Efficiency reached only $110 billion. Thomas Kikis, head of U.S. markets at Standard Chartered, pointed to the rush of corporate bond issuance and large initial public offerings, warning of turmoil from after Labor Day through Christmas.

4. Is the Weak-Won Boost Over? Exporters Face Earnings Alarm

- Key points: Yuanta Securities Korea estimated that if the exchange rate of 1,350 won as of the 7th holds as the September average, the third-quarter average would fall to 1,415 won, 87 won lower than the previous quarter and the steepest quarterly drop in a decade. Hyundai Motor and Kia were estimated to have gained 3.7 trillion won and 4.3 trillion won in additional operating profit, respectively, from the won's decline between the first quarter of 2023 and the second quarter of this year. Korean memory makers receive sales proceeds in dollars while spending about 20% of revenue in won. As a result, a stronger won cuts profit more sharply than revenue, and Nomura estimated that a 10% rise in the won would reduce operating profit by about 12%. Citigroup lowered its target prices for Samsung Electronics and SK hynix to 430,000 won and 3 million won, respectively, and cut its third-quarter operating profit estimate for Samsung Electronics by 10% to 104.1 trillion won from 115.5 trillion won.

5. Dollar Selling Cascades on Expectations of Further Won Gains; Authorities to Slow Pace for Now

- Key points: The won-dollar rate fell to as low as 1,334.7 won intraday in the Seoul foreign exchange market on the 7th, the weakest level for the dollar since 1,331.3 won on Oct. 4, 2024. That marks a drop of more than 220 won in a little over two months from an intraday level of 1,561.5 won on June 5, and the yen's rise to the 155 range against the dollar on expectations of a Bank of Japan rate increase also contributed to the won's strength. As the rate plunged into the 1,330-won range, the National Pension Service is said to have halted its strategic currency hedging and begun buying dollars again, and a senior foreign exchange official also acknowledged the possibility of some purchases by the fund. The NPS held about 770 trillion won in overseas stocks and bonds as of the end of June, meaning that applying the maximum 15% ratio would theoretically allow hedging of up to about 115 trillion won. Lee Min-hyuk, a researcher at KB Kookmin Bank, said the exchange rate is headed lower over the medium to long term as dollar supply from the current account surplus prevails.

6. A Few Prompts Build a 3D Game in 45 Minutes: "The Astra Moment Is Coming"

- Key points: Assessments continue that OpenAI's newly unveiled AI model, GPT-6 Astra, marks the arrival of an "Astra moment" four years after ChatGPT's debut in late 2022. Astra completed the role-playing game Pokemon FireRed in 18 hours and 12 minutes using only screen analysis, without external walkthrough information, and was the only model evaluated to score a perfect 450 points on the 2026 College Scholastic Ability Test. Observers say demand for high-bandwidth memory and ultra-fast networking will expand as total tokens consumed per task surge under a recurrent depth approach, which increases reasoning depth through repeated computation rather than larger model size. KB Securities said finished memory inventories at Samsung Electronics and SK hynix have plunged to less than 10 days in the current third quarter, while Goldman Sachs projected that global memory demand is being met at only about 60% and that the supply shortage will persist through 2028.