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  • Education Officials Discuss Future College Admission System
    Education Officials Discuss Future College Admission System Calls to move away from the current college entrance exam, which relies on multiple-choice questions, and the relative grading system have emerged in the education sector. To cultivate creative talents who will lead in the age of artificial intelligence (AI), the National Education Commission has begun nationwide discussions on the direction of future college admission systems, including the introduction of written assessments. On August 11, the National Education Commission, in collaboration with the Incheon Metropolitan Office of Education, held a field discussion titled 'Envisioning the Future College Admission System with the Public' at the Incheon Collaboration MICE Convention Center. The event, organized ahead of the establishment of a mid- to long-term national education development plan, attracted over 100 local students, parents, and educators for in-depth discussions. In her opening remarks, Chairperson Cha Jeong-in emphasized, "In this transformative era where AI technology is advancing rapidly, what students need is not rote memorization but a spirit of inquiry and creativity that encourages deep thinking and questioning. We must gather wisdom on whether the current college admission system is sufficient to prepare for the future society and what the key directions for improvement should be." Incheon Superintendent of Education Do Seong-hoon stated, "We need to nurture 'living inquirers' who can express their thoughts in their own words rather than simply accumulating knowledge. While AI can assist in exploration, the final judgment must be made by humans. The Incheon Education Office is promoting 'Reading, Walking, Writing (RWW) AI' education as a core policy to achieve this.""Current Curriculum Misaligned with Grades and Entrance Exam; Careful Revisions Needed"In the first part of the discussion, critical insights into the contradictions of the current college admission system and directions for reform were presented. Kim Dong-jin, a member of the National Education Commission's Special Committee on College Admission Systems and a teacher at Dongsan High School, stated in his presentation on 'Directions for College Admission Systems to Prepare for Future Society,' "Our children have been training for 12 years to identify incorrect answers in multiple-choice questions that AI can solve in one second. The current college entrance exam, which requires solving math problems in 3 minutes and 20 seconds and other subjects in 1 minute and 30 seconds, cannot accurately measure true thinking ability." He continued, "While the current curriculum emphasizes creative thinking, the grading system is based on relative evaluation, and the entrance exam consists of high-difficulty multiple-choice questions, creating a serious misalignment. We need a 'careful revision' centered on the professionalism of educators, based on sufficient preparation to avoid chaos from a rush for short-term results.""Teachers Will Evolve into 'Growth Coaches' Providing Tailored Feedback"In the subsequent presentation, Lee Min-seok, a member of the National AI Strategy Committee's Education and Talent Division, outlined a vision for 'AI-based written assessments.' He noted, "The majority of students, parents, and teachers strongly desire improvements to answer-focused evaluations and the expansion of process- and inquiry-based written assessments. AI technology can address the time, cost, and reliability issues that have previously hindered the full implementation of written assessments." He clarified concerns about technology, stating, "AI is merely a tool for creating draft scoring criteria; the final score determination and authority rest entirely with the teachers. By alleviating the substantial grading burden, teachers will transform into 'growth coaches' who can identify individual students' weaknesses and provide tailored feedback." Following the presentations, small group discussions took place. All participants reviewed the appropriateness of the current evaluation system in preparing for future society and discussed the core direction of the college admission system. Notably, professional facilitators were involved to assist in smooth discussions and consensus-building. The National Education Commission plans to continue these field discussions, starting with the Incheon event, followed by sessions in Jeonnam and Gwangju on August 20 and in Daegu on August 26. The reform proposals for the college admission system, developed through these discussions and public participation committees, will be finalized in the mid- to long-term national education development plan to be announced in March next year.* This article has been translated by AI. 2026-08-11 16:12:00
  • Chinese Stocks Decline Amid Stalled U.S.-Iran Negotiations; Alibabas Data Center News Boosts Sector
    Chinese Stocks Decline Amid Stalled U.S.-Iran Negotiations; Alibaba's Data Center News Boosts Sector Chinese stocks, which had seen a slight increase the previous day, fell on August 11. The indices lost ground as negotiations between the U.S. and Iran showed signs of stagnation. The Shanghai Composite Index closed down 0.82% at 3,934.09, while the Shenzhen Component Index dropped 0.40% to 14,259.44. The ChiNext Index, however, rose 0.34% to finish at 3,549.16.The peace talks between the U.S. and Iran, as well as discussions regarding the reopening of the Strait of Hormuz, are facing significant challenges. U.S. President Donald Trump has complicated negotiations by demanding compensation for damages caused by the war, raising concerns that the normalization of the Strait of Hormuz may take longer than expected. Due to instability in the Middle East, Brent crude oil prices have surged to around $88 per barrel, marking the highest level since July 31.The upcoming release of the U.S. Consumer Price Index (CPI) for July on August 12 is also seen as a critical factor. Rising oil prices could lead to higher-than-expected inflation in the U.S., which may dampen expectations for interest rate cuts by the Federal Reserve. Additionally, the recent significant gains in the Chinese stock market have prompted profit-taking, contributing to the decline.According to a report from China International Capital Corporation (CICC), the Shanghai Composite Index has risen 4.7% since July 20, while the ChiNext Index has increased by 3.9%. The report noted, "Considering the current domestic and international environment and the state of China's capital markets, the recovery trend since July 20 is likely to continue, and the medium-term upward trend remains intact."Data center stocks saw significant gains on this day. Companies such as Hangang Co. and Hongbo Co. hit their daily price limits. The news that Alibaba has completed a method to reduce the construction period of large AI data centers to 100 days served as a positive catalyst. Typically, building a data center takes about a year, but Alibaba's modular construction process has cut the time by 100 days and reduced costs by 10%. This has led to expectations of accelerated data center construction, boosting related stocks.Film-related stocks also performed well, with companies like Huazhi Shumei and Beijing Culture reaching their daily price limits. Several box office hits have emerged, with this month's box office already surpassing 2 billion yuan. The film "Spider-Man" is currently leading in ticket pre-sales. Additionally, the new release "Welcome to Dragon Restaurant," which premiered on August 11, has received a rating of 9.8, the highest in the past three years.Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7900 yuan, an increase of 0.0016 yuan from the previous day, reflecting a 0.2% decline in the yuan's value.* This article has been translated by AI. 2026-08-11 16:12:00
  • Yen Faces Pressure Again as Dollar Rises to 159 Yen, Threatening 160 Yen Mark
    Yen Faces Pressure Again as Dollar Rises to 159 Yen, Threatening 160 Yen Mark Following the coordinated currency intervention by the United States and Japan, the yen has risen to around 159 yen per dollar, threatening to breach the 160 yen mark. The effects of the intervention have diminished by more than half in just one week. Although speculative selling of the yen has significantly decreased, the continued demand for dollars for oil imports and the slow return of overseas profits to Japan are contributing to the yen's weakness.On the morning of August 11, the yen-dollar exchange rate was trading at approximately 159.16 to 159.18 yen per dollar in the Tokyo foreign exchange market. Earlier, on August 10, the rate also briefly rose above 159 yen in the New York foreign exchange market. The yen's value has dropped to its lowest level since the U.S.-Japan intervention at the end of last month.Before the intervention on July 30, the yen-dollar exchange rate was around 162.80 yen per dollar, but it fell to about 155.20 yen on August 3, marking a decline of 7.60 yen in just three days. However, within five trading days, more than half of that decline has been reversed. From a technical perspective, the current exchange rate falls within the so-called 50% retracement zone, a critical juncture that could determine future market trends. If this level is surpassed, market attention will shift to whether the post-intervention decline can be fully reversed.Charts also reveal the limitations of the intervention. The 200-day moving average, which reflects the medium to long-term trend based on the average closing prices over the last 200 trading days, serves as a benchmark for trading and stop-loss orders. This time, it has acted as a barrier to yen appreciation. The yen-dollar exchange rate fell below the 200-day moving average immediately after the intervention but failed to stabilize at that level and has since risen again. The Nihon Keizai Shimbun noted on August 11 that the intervention has not changed the trend of yen depreciation. Christopher Rupkey, chief economist at FWDBONDS, stated that with the forex market expanding and trading capital increasing, "intervention alone is insufficient to change the direction of the exchange rate."However, the intervention has not been entirely ineffective. According to the U.S. Commodity Futures Trading Commission (CFTC), the net short position in yen held by non-commercial entities, including hedge funds, decreased by 70% to 45,473 contracts as of August 4, marking the largest weekly decline on record. Mark Chandler, chief market strategist at Bannockburn Global Forex, remarked that the intervention successfully pressured speculators to cover their short positions in yen. Nevertheless, the yen has weakened again, as the Nikkei attributed this to persistent dollar buying by Japanese importers and other real demand.Japan's Record SurplusJapan's international balance of payments data reveals a structure where the current account surplus does not lead to yen buying. According to statistics released by the Japanese Ministry of Finance on August 10, the current account surplus for the first half of the year reached 17.4292 trillion yen (approximately $154.8 billion), a 22.5% increase from the same period last year, marking the highest surplus on record for the first half of the year. Increased exports of automobiles to the U.S. and electronic components to Asia contributed to a trade surplus of 742.1 billion yen, the first surplus for the first half of the year since 2021.Typically, a current account surplus generates demand for converting foreign earnings into yen, which would strengthen the currency. However, the average yen-dollar exchange rate for the first half of the year was 158.24 yen per dollar, up about 10 yen from 148.54 yen during the same period last year. Thus, while the surplus has accumulated, the value of the yen has actually declined.The primary driver of the current account surplus was the primary income balance, which reflects dividends and interest received by Japanese companies from their overseas subsidiaries, amounting to 20.4914 trillion yen, the highest on record for the first half of the year. The issue is that a significant portion of these earnings does not return to Japan. Of the 15.9083 trillion yen in foreign direct investment during the first half of the year, over 40%, or 6.5086 trillion yen, was reinvested in overseas subsidiaries. Shotaro Kugo, a senior researcher at the International Monetary Fund, noted that the lack of yen buying demand corresponding to the absolute size of the current account surplus is due to the reinvested earnings remaining abroad.In contrast, foreign direct investment in Japan amounted to 4.2623 trillion yen, falling short of 30% of Japan's outbound direct investment. Including securities investments, a total of 18.4893 trillion yen flowed out of Japan through the financial account in the first half of the year. Typically, a weaker yen would lead to increased domestic investment over foreign investment, creating yen buying demand that could mitigate yen depreciation. However, Japan's potential growth rate remains around the mid-0% range, and there is a labor shortage. Koya Miyamae, a senior economist at SMBC Nikko Securities, stated that domestic supply constraints, such as labor shortages, hinder adjustments through exchange rates.Recent increases in oil prices are also intensifying pressure on the yen. The Iran-aligned Houthi forces in Yemen attacked Saudi oil facilities with drones, raising uncertainties surrounding energy transport. On August 10, West Texas Intermediate (WTI) crude oil futures briefly rose to around $82 per barrel. Japan, which heavily relies on resource imports, sees an increase in dollar demand from importers when oil prices rise, leading to a decline in the yen's value. In fact, the current account recorded a deficit of 92.3 billion yen in June, marking a return to negative territory for the first time in 17 months. The increase in import costs due to turmoil in the Middle East led to a 24.3% rise in import amounts compared to the same month last year, and the yen-denominated price of crude oil imports reached 117,684 yen per kiloliter, an 84.7% increase, the highest since 1979.With investment earnings remaining abroad, stagnant foreign direct investment in Japan, and the burden of rising oil import costs, there are numerous reasons to sell yen. While the intervention may provide temporary relief, reversing this trend is challenging. Consequently, there is a growing recognition of the need for financial policy measures beyond intervention. The U.S., which unusually participated in yen buying at the end of last month, is also publicly supporting financial policy measures to correct the undervaluation of the yen. U.S. Treasury Secretary Scott Vessenet stated on X (formerly Twitter), "We strongly support financial measures to correct the significant undervaluation of the yen."Calls for Early Rate Hike by Bank of JapanTo prevent the entrenchment of yen depreciation, calls for an early interest rate hike are growing within the Bank of Japan (BOJ). In the minutes from the July monetary policy meeting released on August 10, several policymakers expressed a proactive stance on early rate hikes. One member noted that the pace of rate increases could be faster than market expectations. According to Dotani Research, the probability of a rate hike in September reflected in the interest rate swap market has risen to 67%.Kazuo Monma, a former BOJ director and executive economist at Mizuho Research Institute, stated, "It has become difficult for the government to restrain the BOJ's interest rate hikes." This is due to the Takaiichi Sanae administration's emphasis on U.S.-Japan relations, making it challenging to disregard the U.S. desire for yen stability. The market has already begun to factor in a scenario where the current policy rate of 1.0% could rise to around 1.5% between this winter and next spring.However, there is a variable this week. While there are concerns that intervention alone cannot change the trend of yen depreciation, Japan's Obon holiday, similar to Korea's Chuseok, begins on August 13, coinciding with the U.S. summer vacation period, leading to reduced trading volumes. This could result in significant fluctuations in the exchange rate, as even small amounts can sway the market. If the yen surpasses 160 yen per dollar, the likelihood of further intervention by authorities increases.* This article has been translated by AI. 2026-08-11 16:08:00
  • KOSPI Rises 0.7% on Strong Samsung Electronics Performance; KOSDAQ Stabilizes
    KOSPI Rises 0.7% on Strong Samsung Electronics Performance; KOSDAQ Stabilizes The KOSPI closed higher, buoyed by strong performances from major semiconductor stocks, including Samsung Electronics. After starting the day with a decline, the index reversed course and surpassed the 6,400 mark during trading.On August 11, the Korea Exchange reported that the KOSPI rose by 45.87 points (0.73%) to close at 6,345.53. The index opened at 6,240.06, down 59.60 points (0.95%), but turned positive during the morning session, reaching a high of 6,405.81.Individuals sold a net 72.4 billion won worth of shares, while foreign and institutional investors bought a net 44.6 billion won and 31.9 billion won, respectively.Among the top market capitalization stocks, Samsung Electronics finished at 239,500 won, up 9,500 won (4.13%) from the previous trading day. Other gainers included Samsung Electronics preferred shares (4.77%), SK Hynix (0.35%), Samsung Biologics (2.55%), Samsung Life (3.21%), and Samsung C&T (3.87%). Conversely, LG Energy Solution (-3.54%), Hanwha Aerospace (-4.69%), KB Financial (-2.97%), Samsung Electro-Mechanics (-0.94%), and Hyundai Motor (-1.23%) saw declines.The KOSDAQ also closed higher, gaining 3.37 points (0.39%) to finish at 857.84. The index opened at 848.59, down 5.88 points (0.69%), but turned positive during the morning session, reaching a high of 875.16 before giving back some gains and fluctuating in a narrow range.Individuals were net buyers, purchasing 435.2 billion won, while foreign and institutional investors sold a net 358.1 billion won and 96.7 billion won, respectively.Top KOSDAQ stocks showed mixed results. JUSUNG Engineering (12.15%), Wonik IPS (6.40%), HLB (3.07%), IoTech (3.22%), and Rino Industry (1.13%) gained, while Alteogen (-5.89%), EcoPro (-3.42%), EcoPro BM (-4.36%), ABL Bio (-4.81%), and Rainbow Robotics (-1.84%) declined.Lim Jeong-eun, a researcher at KB Securities, noted, "The KOSDAQ initially rose by over 2% but gave back some gains as capital flowed toward Samsung Electronics, which saw a 4% increase. The KOSPI recorded a slight rise due to net buying from foreign and institutional investors. From August 1 to 10, total exports reached $21.3 billion, a 45% increase compared to the same period last year, with semiconductor exports hitting $10 billion, up 155%, both setting records for the period and improving overall investment sentiment in the semiconductor sector."Looking ahead, Lim mentioned that earnings reports from companies like Kolmar Korea and Classys are scheduled for tomorrow, and there is interest in whether the strong performance of the cosmetics and beauty device sector will continue.Meanwhile, in the Seoul foreign exchange market, the weekly closing exchange rate for the won against the dollar was recorded at 1,416.0 won, down 2.4 won from the previous trading day.* This article has been translated by AI. 2026-08-11 16:08:00
  • Bank of Korea Deputy Governor: Additional Rate Hikes Likely Without Major Economic Shock
    Bank of Korea Deputy Governor: Additional Rate Hikes Likely Without Major Economic Shock Bank of Korea Deputy Governor Yoo Sang-dae stated on August 11 that "the possibility of an additional interest rate hike is high unless there are significant economic shocks."During a press conference held at the Bank of Korea in Jung-gu, Seoul, Yoo responded to a question regarding whether the recent remarks by the Monetary Policy Committee about the need to maintain a tightening stance implied that further rate increases would not be limited to just one.He noted, "The direction of interest rate increases or decreases corresponds to the economic cycle," adding, "While the speed and magnitude of rate hikes are complex issues, what is certain is that we have set the benchmark rate higher in this cycle." He further stated, "Additional hikes will follow in this cycle, and the timing and pace will be determined based on data."Yoo acknowledged that while the recent inflation rate is lower than during the previous rate hike period following the outbreak of the Ukraine war, the upward trend could persist for an extended period.He remarked, "This time, I do not foresee inflation rising to the levels seen during the Russia-Ukraine war. However, demand pressures from economic recovery will gradually increase core inflation, and while the magnitude may not be large, its persistence will pose challenges for monetary policy."When asked about the potential end of the current monetary tightening cycle, Yoo said, "It is not appropriate for me to answer that as I approach my retirement next week," but added, "While inflation is not expected to rise as high as during the Russia-Ukraine war or previous hikes, demand pressures will likely keep it above target levels for a considerable time."He emphasized the need to closely monitor the Bank of Korea's growth outlook and inflation trajectory, particularly the economic forecast to be released on August 27.As he prepares to retire on August 20, Yoo indicated that he would assess the upcoming monetary policy decisions based on daily customs export figures, credit card usage data, and the Bank of Korea's economic outlook materials.Reflecting on past inflationary periods in the U.S., he noted that the longer inflation exceeds target levels, the stronger the pathways for expected inflation and wage increases become.Yoo stated, "If people do not believe that inflation will converge to the target level, a situation where inflation anchoring does not work well could lead to slower declines in inflation even with monetary tightening, negatively impacting production."He also mentioned that raising interest rates could help temper risk appetite, contributing to the alleviation of financial imbalances.Regarding the recent decline of the exchange rate to the low 1400s, he remarked that while it provides some leeway for interest rate decisions, it is not a critical factor. He stated, "Exchange rates and stock levels are not traditionally significant factors for central banks. The most important considerations are whether core inflation will remain high and whether economic growth will continue." He added that despite the recent drop, the 1400 level remains quite high and poses significant upward pressure on prices.However, he projected that the exchange rate would stabilize downward in the medium to long term.Yoo explained that from late last year to early this year, short-term factors such as supply and demand and expectations played a larger role in determining the exchange rate than fundamentals, which led to a significant increase. He noted that recently, the influence of supply and demand factors has diminished, while the impact of long-term factors such as interest rate differentials and current account surpluses has grown.He concluded, "While supply and demand factors and expectations still exist, I do not foresee a rapid decline in the exchange rate, but if asked for a direction, I would lean towards a downward trend."* This article has been translated by AI. 2026-08-11 16:04:20
  • Shift in South Koreas ETF Market as AI Gains Traction
    Shift in South Korea's ETF Market as AI Gains Traction The South Korean exchange-traded fund (ETF) market is undergoing a rapid generational shift. As artificial intelligence (AI) and semiconductor-related products gain attention, some thematic ETFs focused on China, mobility, and biotechnology are disappearing from the market.According to the Korea Exchange, 19 domestic ETFs have entered the delisting process from January 1 to August 10 this year. The delisted thematic products include those related to China, mobility, biotechnology, and consumer sectors, which once attracted investor interest.Among the delisted ETFs are the KIWOOM China A50 Connect MSCI and 1Q China H(H), both related to China. Additionally, KIWOOM Global Future Mobility, KIWOOM Fn Gene Innovation Technology, and VITA MZ Consumer Active have also exited the market.Notably, the KIWOOM China A50 Connect MSCI, KIWOOM Global Future Mobility, and KIWOOM Fn Gene Innovation Technology faced delisting procedures after their trust principal amounts remained below 5 billion won (approximately $4 million) for over a month. This indicates that as the ETF market expands, there is also a cleanup of products that have not attracted investor interest.However, not all delisted ETFs can be attributed to a decline in investor demand. The list also includes maturity-type bond products such as ACE 26-06 Corporate Bonds (AA- or higher) Active and BNK 26-06 Special Bonds (AAA or higher) Active.In contrast, AI, semiconductor, and information technology (IT) related products are standing out in this year's ETF market. Products like TIGER 200 IT Leverage, TIGER US Philadelphia Semiconductor Leverage (Synthetic), HANARO Fn K-Semiconductor, and RISE Network Infrastructure have ranked among the top performers since the beginning of the year. Expectations for growth in the AI industry are spreading to semiconductors and network infrastructure, increasing interest in related products.Newly listed products are also highlighting the presence of AI themes. This year, FOCUS AI Semiconductor Weekly Fixed Covered Call, RISE US AI Power Infrastructure Active, and ACE K-Semiconductor TOP2+ have been newly listed.A securities industry official stated, "Investor interest is rapidly shifting within the ETF market, leading to a generational change among products. From the perspective of asset management firms, it seems that there will be a continued restructuring where products with declining demand are phased out and new products that meet emerging investment needs are introduced."* This article has been translated by AI. 2026-08-11 16:04:10
  • Park Hong-geun Calls for Final Review of Next Years Budget, Urges Elimination of Marriage Penalty for Youth
    Park Hong-geun Calls for Final Review of Next Year's Budget, Urges Elimination of Marriage Penalty for Youth Park Hong-geun, the Minister of the Office for Government Policy Coordination, emphasized the need to review the upcoming budget and urged the elimination of the so-called 'marriage penalty' that discourages young people from marrying due to government policies.On August 11, the Ministry held its eighth expanded executive meeting at the Government Sejong Complex, where Minister Park led discussions on the 2027 budget, the national fiscal management plan, and a support package for the youth generation.Minister Park stated, "August is a crucial time to present the tasks we have been diligently considering and preparing to the public," as he reviewed the preparations for major policies to be announced later this month.The ministry is finalizing the 2027 budget and the national fiscal management plan for 2026-2030. Park urged that the reviewed tasks should translate into policies and projects that the public can genuinely feel, calling for meticulous attention to detail to enhance their quality.He also stressed the importance of communication with the public following the policy announcements. "All policies are completed when the public understands and resonates with them, so we will make special efforts to explain and communicate from the perspective of the citizens," he said.While checking the status of the support package for the youth generation, Park highlighted that young people are structurally vulnerable in society and require comprehensive support in areas such as education, employment, assets, housing, and childbirth and childcare. He urged attention to resolving the marriage penalty to ensure that young people do not hesitate to marry due to government policies.With the regular National Assembly session approaching in September, he called for strengthened consultations with the Assembly on key legislative proposals, including the Public Interest Whistleblower Encouragement Fund Act and the Voluntary Carbon Market Act, to expedite the introduction of these bills.Additionally, regarding the upcoming Eulji Exercise scheduled for the third week of this month, Park requested that this training, the first since the establishment of the ministry, be used as a practical opportunity to review the emergency response system and roles.* This article has been translated by AI. 2026-08-11 16:04:10
  • Financial Order in Turmoil as Interest Rates Reverse for Deposits and Loans
    Financial Order in Turmoil as Interest Rates Reverse for Deposits and Loans The financial market is experiencing a shake-up as the traditional order of lending and deposit rates is disrupted. Typically, borrowers with higher credit scores receive lower interest rates, while longer deposit terms yield higher rates. However, changes in lending practices due to household loan management and inclusive finance policies have led to a phenomenon of 'interest rate reversal' across various financial products.According to the Korea Federation of Banks, among 18 banks, 12 reported lower average interest rates for household loans in June for borrowers with lower credit scores. For instance, K Bank offered an average rate of 5.47% for borrowers with scores below 600, which is 0.60 percentage points lower than the 6.07% average for those with scores between 801 and 850. This trend contradicts the usual expectation that lower credit scores result in higher rates.A similar trend is observed in the capital industry. Among 12 capital companies offering mid-interest credit loans in the second quarter, five reported lower average rates for borrowers with lower credit scores. Lotte Capital's average rate for borrowers in the 400s was 11.30%, which is 1.24 percentage points lower than the 12.54% average for those in the 800s. Industry experts attribute these changes to the expansion of inclusive finance and mid-interest loans, as well as the management of loan portfolios by financial institutions.Not only loans but also banks' funding strategies are deviating from established norms. The five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) are offering higher interest rates for one-year time deposits compared to three-year deposits. KB Kookmin Bank and Hana Bank have set the one-year deposit rates 0.8 percentage points higher than those for three-year deposits.Traditionally, longer deposit terms yield higher interest rates, but recent regulations on household loans have restricted the typical avenues for long-term fund management, such as mortgage loans. As banks find it challenging to increase long-term loans, their incentive to secure long-term deposits at higher rates has diminished.A bank official stated, "According to market logic, longer deposits should yield higher rates, but banks lack suitable investment opportunities for long-term funds. Since they cannot indefinitely increase mortgage loans, the incentive to actively secure long-term deposits is also low."As household loan management becomes stricter, variations in loan approval thresholds are emerging even among borrowers with similar conditions, depending on when they apply. This is due to financial institutions adjusting their lending capacity based on their annual loan growth targets and remaining limits.Major commercial banks have already begun to reduce mortgage loan limits or halt new approvals. KB Kookmin Bank has lowered its mortgage loan limit from 600 million won to 300 million won. In internet-only banks like Kakao Bank, the competition has intensified, with daily limits quickly exhausted as mortgage applications open at 6 a.m.A financial industry source remarked, "As lending regulations tighten, the timing of loan applications can significantly affect outcomes, leading to a situation where loans are almost determined by chance."* This article has been translated by AI. 2026-08-11 16:04:00
  • After Leverage Regulation, Semiconductor Dominance Eases as Other Sectors Rise
    After Leverage Regulation, Semiconductor Dominance Eases as Other Sectors Rise Following the implementation of supplementary regulations on single-stock leveraged exchange-traded funds (ETFs), the dominance of large-cap semiconductors is showing signs of easing. The upward trend led by Samsung Electronics and SK Hynix is now spreading to sectors such as construction, steel, machinery, and healthcare, indicating a shift towards sector rotation.According to the Korea Exchange, from the implementation of the single-stock leveraged ETF regulations on July 31 to August 10, the top five KRX index fluctuations were KRX Construction (29.71%), KRX Machinery (26.06%), KRX 300 Information Technology (24.84%), KRX Steel (24.74%), and KRX 300 Healthcare (24.51%). This contrasts with the earlier performance where semiconductor and IT-related indices dominated returns, including the KRX SK Hynix Index (103.07%), KRX Samsung Electronics Index (72.64%), and KRX 300 Information Technology (58.32%) from the beginning of the year until July 30.Trading in large-cap semiconductors has also decreased. From May 27, when the single-stock leveraged ETF was launched, until the day before the regulation took effect on July 30, the average daily trading volume for Samsung Electronics was 9.7263 trillion won, but it dropped to 6.9800 trillion won after the regulation, a decrease of 28.2%. Similarly, SK Hynix saw its trading volume fall from 13.5788 trillion won to 8.7841 trillion won, a 35.3% decline. The trading volume for both Samsung Electronics and SK Hynix decreased by 10.9% and 10.3%, respectively, indicating a moderation in the previously overheated semiconductor market.Changes in overall market supply and demand are also evident. The KOSDAQ index has continued to rise since July 31, with only one day of decline. The investment sentiment, which had been concentrated in semiconductors, is now spreading to biotechnology, materials, and small- to mid-cap stocks, suggesting a rotation in investment. Analysts believe that the price adjustments in large-cap semiconductors and the new regulations on single-stock leveraged ETFs are leading to a redistribution of investment funds from previously favored stocks to relatively neglected sectors.Jo Jung-ki, a researcher at SK Securities, stated, "While the weakness of leading semiconductor stocks and related equities continues, most other stocks are showing upward trends. This indicates a phase of easing concentration, where the overall index weakness does not detract from the significant improvement in individual stock trends, and sector rotation is quite pronounced." He added, "As sector rotation continues and the semiconductor sector's share of the KOSPI index naturally decreases, the recent extreme volatility in the index may structurally diminish."However, some analysts caution that this does not signify the end of semiconductor strength. Instead, they view it as a process of finding balance among sectors as the previous concentration eases. Lee Kyung-min, a researcher at Daishin Securities, predicted, "After the easing of semiconductor supply concentration and volatility, semiconductors will re-establish themselves as leading stocks, accompanied by a rise in undervalued neglected stocks based on their performance."* This article has been translated by AI. 2026-08-11 16:04:00
  • Increased Delisting Standards Complicate IPOs for Investment Banks
    Increased Delisting Standards Complicate IPOs for Investment Banks As financial authorities tighten delisting criteria to weed out underperforming companies, investment banks are facing increased complexities in managing initial public offerings (IPOs). Concerns are growing in the investment banking (IB) sector about the heightened risk of losses on held investments and the potential blockage of future IPO opportunities.According to the financial investment industry on August 11, the primary worry for IB firms is the inability to recover invested funds and a contraction in operational capacity.When managing IPOs, securities firms are required to acquire a certain percentage of shares or make direct equity investments in the issuing company before the listing. However, as the delisting criteria become stricter and more companies fall under these regulations, shares that are locked up during the lock-up period or those that have not been disposed of could face total delisting, leading to significant valuation losses.Moreover, a more pressing issue is the restriction on future deal assignments. Under current regulations, if a security firm has a company it listed that is delisted within two years, the firm faces limitations on its eligibility to manage IPOs through the business model track for a specified period.The business model track is a key pathway for listing companies that, despite being unprofitable, are recognized for their technological capabilities and growth potential, based on recommendations from securities firms. An increase in delisting cases among managed companies could result in the loss of one of the firm's core revenue sources.In fact, the number of companies at risk of delisting is on the rise. According to Leaders Index, a corporate analysis firm, as of last month, 7.4% (192 companies) of domestic listed firms fell below the new market capitalization thresholds (300 billion won for KOSPI and 200 billion won for KOSDAQ) set just a month prior.Looking ahead to next year, when the thresholds will be further raised (500 billion won for KOSPI and 300 billion won for KOSDAQ), it is projected that 18.6% (479 companies) of all listed firms will not meet the criteria for maintaining their listings. This indicates an increasing burden of underperforming companies that securities firms will have to manage.An IB industry insider stated, "The tightening of delisting requirements is a sensitive issue for securities firms. While the loss of held shares is a concern, the risk of being blocked from recommending future listings is growing, which will inevitably lead to excessive caution in deal selection and underwriting assessments by securities firms."* This article has been translated by AI. 2026-08-11 16:04:00