SK hynix Buyback Ushers In 'Other Corporations' Era, Reshaping KOSPI Flows

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-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.

1. SK hynix Ushers In 'Other Corporations' Era, Reshaping KOSPI Supply-Demand Structure

Summary: In the first two days of its buyback, SK hynix purchased 2.2243 trillion won ($1.6 billion) of its own shares, supplying about 1 trillion won of mechanical buying to the market each day. With foreigners having net-sold a daily average of 1.0266 trillion won on the KOSPI so far this year, SK hynix's buyback is seen as large enough to offset that gap. On the 21st, an unusual session unfolded: individuals, foreigners and institutions net-sold a combined 1.0882 trillion won, yet "other corporations" net-bought 1.0931 trillion won, closing the KOSPI up 0.88%. Analysts in the securities industry say that once Samsung Electronics' buyback for performance-based bonuses (15 trillion won) is added, the KOSPI's downside resilience will strengthen further.

2. 'Roller-Coaster KOSPI' Plunges Then Rebounds: Crying Over U.S. Rates, Smiling on Shareholder Returns

Summary: With the U.S. 30-year Treasury yield topping 5.3%, the KOSPI broke past the 7,200 level intraday on the 18th before plunging within a daily swing of 427.84 points. On the 20th, the day after SK hynix announced its shareholder returns, the index soared 381.41 points, or 5.89%, triggering this year's 24th buy-side sidecar. SK hynix said it would return more than 50% of its cumulative free cash flow (FCF) for 2025-2027 to shareholders, and JPMorgan called the buyback an aggressive move equal to 63% of trailing 12-month FCF. Domestic and overseas brokerages estimate SK hynix's total shareholder returns will reach 150 trillion to 230 trillion won through next year. The prevailing view is that market volatility will persist for some time, with major events such as Nvidia's earnings, the Jackson Hole meeting and the Bank of Korea's rate-setting meeting lined up next week.

3. LS Cable Builds Out European and North American Supply Chains, Riding the Second AI Super-Cycle

Summary: LS Cable is building a new busduct (power distribution equipment) plant in Poland or Northern Europe to meet demand for AI data center power infrastructure. With the combined capital expenditure (CAPEX) of the five Big Tech firms surging from $394.5 billion last year to $781.9 billion this year and a projected $975.4 billion next year, LS Cable subsidiary Gaon Cable's U.S. arm (LSCUS) has already secured long-term busduct supply contracts worth some 5 trillion won in total. LS Cable's order backlog as of the end of June stood at a record 9.5535 trillion won, and LSCUS signed an additional 200 billion won contract this month while negotiating volumes two to three times its existing contracts. With the AI data center power infrastructure market projected to grow to 494 trillion won by 2030, analysts say interest is rising across the group of companies set to benefit.

4. Trump's Market Intervention Backfires, Fueling Only 'Dollar Erosion'

Summary: The U.S. Treasury doubled the size of its long-term bond buybacks from $2 billion to $4 billion per operation, but yields rose instead and the dollar index (DXY) hit 98.80, its lowest in about 100 days. On Wall Street, the dominant view is that expanding the buybacks is merely a stopgap while structural inflation factors remain unresolved — national debt topping $40 trillion, high oil prices and a surge in Big Tech corporate bonds to fund AI investment. Spot gold jumped 2.2% to $4,615.65 per troy ounce on the 21st and bitcoin rose 22% this week, but there are warnings that these alternative assets will struggle to sustain their gains if bond yields climb alongside them. With the probability of a Federal Reserve rate hike at its September FOMC meeting rising to 39.9%, the outlook is that global financial market volatility could widen further as unpredictable policy moves continue ahead of the midterm elections.

5. The Lure of 50% Annual Coupons: The Flip Side of the ELS Rush Into Samsung and SK hynix

Summary: ELS sales in July reached 3.5 trillion won, the highest since April 2023, with funds concentrating in products offering annual coupons of 40% to 50% tied to Samsung Electronics (005930.KS) and SK hynix as underlying assets. This reflects a shift of risk appetite into ELS among retail investors blocked by regulations on leveraged ETFs; the structure results in principal losses if either stock plunges 70% during the term and then finishes well below its maturity reference price. Given the precedent of the 2024 Hong Kong H-index ELS, which produced 10.4 trillion won in principal with confirmed losses and 4.6 trillion won in losses, the Financial Supervisory Service plans to strengthen oversight of structured products starting next month. Analysts point out that investors should carefully examine an underlying asset's knock-in conditions and loss structure before being drawn in by high coupons.

6. "Is Opening an ISA All It Takes?": How to Divide Roles Across Accounts, From a PB

Summary: An expert at Shinhan Bank's PWM Center presented a strategy of dividing roles across accounts — a general account for short-term spare funds, an ISA for medium-term savings, and pension savings and IRP for long-term retirement funds. To maximize the tax-saving benefits of an ISA, the expert recommends prioritizing assets with heavy tax burdens, such as overseas equity ETFs, high-dividend stocks and high-yield bonds, and actively using the profit-and-loss netting structure. The government's proposed "productive-finance ISA" would keep a structure centered on domestic assets while expanding contribution limits and tax benefits, and contentious clauses such as the abolition of carrying over unused limits are likely to be revised. The analysis holds that a parallel approach is effective — placing major overseas indexes at the core while using domestic assets strategically according to market cycles — rather than aggressively increasing domestic assets lured by tax benefits.