Retirement Funds Pile Into U.S. ETFs, But Korean Chips Win on Returns

* 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. Long-Term Retirement Pension Investors Return to U.S. Markets

- Key Summary: Retirement pension customers again bought U.S. index ETFs the most in August, betting on U.S. assets for a second straight month after July. Seoul Economic Daily commissioned a major securities firm to analyze the top five net purchases in August by 85,172 retirement pension customers, and TIGER U.S. S&P 500 ranked first at 89.4 billion won, followed by TIGER U.S. Nasdaq 100 (57.2 billion won), KODEX U.S. Nasdaq 100 (34.3 billion won) and KODEX U.S. S&P 500 (26.3 billion won). Among domestic products, only KODEX AI Semiconductor TOP2 Plus, which holds Samsung Electronics (005930) and SK hynix (000660), drew net buying, at 18.8 billion won. Still, KODEX AI Semiconductor TOP2 Plus posted a cumulative return of 107.49% this year, far exceeding the 8% to 12% average returns of the U.S. index ETFs.

2. Foreign Investors Exit as Trading Value Hits Year's Low, Hitting Rate-Sensitive Bio and Brokerage Stocks

- Key Summary: Pharmaceutical and biotech stocks and brokerage shares, both sensitive to interest rates, took a direct hit as the likelihood of a U.S. rate increase in September grew. On the 31st, the KOSPI closed 0.46% higher at 6,820.02, but the KOSDAQ, which has a larger share of growth stocks, slipped 0.49% to 834.29, with Alteogen (196170), ABL Bio (298380) and Mirae Asset Securities (006800) all declining. Average daily trading value on the KOSPI in August was 25.75 trillion won, halved from 50.35 trillion won in June, and investor deposits stood at 99.81 trillion won on August 28, below 100 trillion won for a third consecutive day. After Federal Reserve Chair Kevin Warsh's remarks at Jackson Hole, the probability of a September rate increase surged from around 35% to 59.7%, prompting expectations of treacherous trading conditions until the Federal Open Market Committee (FOMC) meeting on September 15-16.

3. China Leads in Humanoids, Thanks to Mega M&A

- Key Summary: China has closed the robot technology gap in a single stride using mergers and acquisitions (M&A), rising to the front of the humanoid industry. Midea, which started out as a bottle cap manufacturer in 1968, acquired Germany's Kuka, one of the world's four largest industrial robot makers, for 4.5 billion euros in 2016, and Kuka now operates six plants in China, supplying robots to advanced industrial sites including satellite and rocket production. The U.S. Congressional advisory body, the U.S.-China Economic and Security Review Commission (USCC), assessed in a report last year that the Kuka acquisition accelerated "Made in China 2025." A Seoul Economic Daily analysis of disclosures by Korean and Chinese robot companies found China has invested $5.6 billion in at least 13 core robot companies since 2016, compared with $1.6 billion for South Korea.

4. Industrial Output Pauses After a Month, Flat Production and 2.4% Drop in Consumption

- Key Summary: Industrial output in July stayed level with the previous month, pausing after just one month, due to base effects and the impact of strikes at some sites. According to the July industrial activity trends report released by the National Data Office on the 31st, the all-industry production index was flat at 120.2, while mining and manufacturing output rose 0.2% as electronic components climbed 20.7% on strength in organic light-emitting diodes (OLED) and printed circuit boards. Retail sales fell 2.4% as passenger car sales plunged 11.1%, and service sector output declined 1.3% on weakness in finance and insurance, the steepest drop in four years and five months since February 2022. Facility investment, by contrast, rose 7.5% as investment in semiconductor manufacturing equipment and in aircraft and ships both increased, expanding sharply for a second straight month.

5. U.S. and Iran Clash Again After a Month, Warnings of a Prolonged War Inside the U.S. Military

- Key Summary: Tensions in the Middle East escalated again as the United States resumed airstrikes on Iran after a month and Iran retaliated with attacks on U.S. military bases in Jordan. A U.S. government official said signs were detected that Iran's Islamic Revolutionary Guard Corps (IRGC) was preparing to fire mine-carrying rockets into the Strait of Hormuz, and that two rocket launch sites on Larak Island were struck, while Iran's Tasnim news agency reported at least two people were killed. The IRGC claimed it struck maintenance depots and fighter jet parking facilities at two air bases hosting U.S. forces in Jordan with missiles, while the U.S. military countered that all were intercepted. The Washington Post reported that the chiefs of staff of the U.S. Army, Navy and Air Force and four-star generals expressed concern through the classified Secretary of Defense Orders Book (SDOB) that a prolonged war with Iran could weaken the U.S. military's ability to respond worldwide.

6. IGIS Asset Management Commits 30 Billion Won to K Twin Towers in Push to Close Deal

- Key Summary: IGIS Asset Management has committed to a 30 billion won equity investment in K Twin Towers, a prime office building in Seoul's Gwanghwamun area, making a decisive move to close the deal. Equity in K Twin Towers totals 356 billion won, comprising 235 billion won in preferred shares and common shares of 76.5 billion won and 44.5 billion won, and the plan is to serve as a catalyst for equity fundraising in a high-rate environment where acquisition financing rates have topped 6%. IGIS Asset Management sold Arenas Yeongjong for 435 billion won in the first half of this year, reaping a gain of about 180 billion won, and is said to be able to fund the investment from the resulting performance fee. Completed in 2012, K Twin Towers has a total floor area of about 83,899 square meters, maintains 100% occupancy with tenants including Microsoft Korea and Woori Card, and IGIS Asset Management has proposed integrated cluster operation with the adjacent Twin Tree Towers and construction of a new wing with views of Gyeongbokgung Palace as its value-add strategy.