Chemicals, Construction, Insurance Earnings Outlooks Jump

* 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 curated news items for each reader type.

1. Earnings Expectations Jump — Chemicals, Construction and Insurance Draw Attention

Key points: Data compiled by FnGuide showed that net profit forecasts for 2026 and 2027 were revised upward for 14 of the KOSPI's 22 sectors, including chemicals, construction and insurance. In chemicals, naphtha prices fell 15.9% while prices of major products rose 5% to 11%, raising expectations for improved profitability. For insurance, better investment returns from rising long-term interest rates were reflected. Construction outlooks were lifted by expanding investment in AI data centers and power grids, along with 21.3 trillion won earmarked for AI-related spending in the government's 2027 budget proposal. Analysts say that with the KOSPI's overall profit growth rate past its peak, sector-level profitability indicators will become the key variable in stock selection.

2. KOSPI Slips Again Just Short of 7,000 — "Oil and Rate Burdens Must Ease"

Key points: The KOSPI recovered the 7,000 line intraday for the first time in 15 trading sessions and climbed as high as 7,100, but closed at 6,954.52, again failing to hold above 7,000. Higher oil prices following a strike on Saudi oil facilities and trade friction between the U.S. and Canada weighed on investor sentiment, while U.S. producer and consumer price data for August, due on the 10th and 11th, emerged as the key variable shaping the direction of long-term rates. Foreign investors bought a net 3.7058 trillion won of KOSPI shares over the past four trading sessions, while individual investors sold a net 14.5486 trillion won over the same period, a clear divergence in fund flows. Results of this month's semiconductor demand survey are expected to determine whether earnings forecasts for next year are revised upward.

3. Samsung to Develop Next-Generation EUV Masks With ASML

Key points: Samsung Electronics has begun joint work with ASML on a standard to enlarge photomasks from 6 inches to 12 inches and has formalized plans to mass-produce DRAM using high-NA EUV from 2028. ASML estimates that adopting larger masks would improve high-NA EUV equipment productivity by about 40%, boosting efficiency relative to equipment costs that reach 500 billion won per unit. While TSMC has taken a conservative approach, sticking with existing EUV even for its 1.3-nanometer process in 2029, Samsung Electronics is moving to close the foundry technology gap through early mass production. Whether it extends the technology to leading-edge 1.4-nanometer foundry processes and strengthens its competitiveness in winning system chip orders is seen as the key point for investors to watch.

4. Flush With 325 Trillion Won, Korean Groups Sit Out the M&A Boom

Key points: Cash and cash equivalents at the flagship units of five groups — Samsung Electronics, SK hynix (000660), Hyundai Motor, LG Electronics and Hanwha Aerospace — stood at 325.1 trillion won in the first half of this year, up 110.4% from the same period last year. While the global AI and IT M&A market expanded 80% year-on-year to $641 billion, critics say large Korean companies spent much of their cash on dividends, bonuses and other outlays that leave nothing behind. Experts estimate that Samsung Electronics alone will put more than 100 trillion won into shareholder returns this year, and warn that the risk of having no core industry could materialize if the semiconductor boom turns in three to five years. Analysts attribute the absence of big deals to a mix of factors, including a management structure focused on short-term results, trauma from failed overseas acquisitions and pressure from activist funds.

5. Kyodo News: Bank of Japan Set to Raise Rate to 1.25% in September

Key points: According to Kyodo News, the Bank of Japan has decided to raise its benchmark rate from the current 1% to 1.25% at its monetary policy meeting on the 17th and 18th, which if carried out would be the highest level in about 31 years. Rising oil prices and a weaker yen have increased the risk that inflation will run higher than expected, and the need to defend the yen by narrowing the U.S.-Japan rate gap was cited as a reason for the increase. Because Japan is the world's largest holder of U.S. Treasuries, concerns were also raised that sales of Treasuries to defend the yen could accelerate a rise in U.S. long-term rates. With the pace of rate increases shifting from once every six months to once every three months, analysts say attention should be paid to unwinding pressure on yen carry trades and to changes in foreign fund flows in the domestic stock market.

6. Saudi-Houthi Clashes Escalate as Brent Nears $100

Key points: Houthi rebels struck key Saudi facilities including Aramco refining plants and an air base with ballistic missiles and drones, raising tensions around the Bab el-Mandeb Strait in the Red Sea, and Brent crude climbed to $98.45 a barrel, approaching the $100 mark. The Houthis warned of further strikes in retaliation for large-scale Saudi airstrikes in Yemen, and the Saudi government confirmed that some energy facilities in the south had suspended operations, amplifying concerns over supply disruptions. Casualties in the conflict zone have reached 728 since the 23rd of last month, and with the intensity of the fighting rising, oil price volatility is unlikely to ease in the near term. Analysts say caution is warranted because whether crude breaks above $100 could affect cost burdens for domestic refining and chemical companies and profitability across export manufacturing.

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