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Sangsang Investment & Securities Reports 11.1 Billion Won Profit in First Half of 2026 Sangsang Investment & Securities recorded a cumulative net profit of 11.1 billion won in the first half of 2026, continuing its profitability for two consecutive quarters. The company has increased the likelihood of an annual profit turnaround by generating steady earnings across its key business segments, including asset management, wholesale, investment banking (IB), and retail.According to Sangsang Investment & Securities, the cumulative net profit for the first half of the year was approximately 11.1 billion won. The company reduced its operating loss from 49.7 billion won in 2024 to 9.2 billion won last year, and it has reported profits in both the first and second quarters of this year.The improvement in performance was evident across all business segments, including asset management, wholesale, IB, and retail.In the asset management sector, the net profit for the second quarter was 3.9 billion won, a 77.3% increase from 2.2 billion won in the same period last year. The restructuring of the equity management team and adjustments to the management scale in response to market conditions contributed to this performance improvement.The bond underwriting sector also expanded its performance. In the first half of the year, the company underwrote 77 capital bonds worth 1.29 trillion won, ranking seventh among securities firms. It also underwrote 32 credit card bonds worth 500 billion won, placing twelfth. The total bond capital market (DCM) underwriting performance, including corporate and bank bonds, was recorded at 126 cases worth 2.55 trillion won.The wholesale sector saw a net profit of 2.4 billion won in the second quarter, a 79.3% increase compared to the same period last year. This growth was driven by an expanded institutional sales base due to upgrades in asset management ratings.The retail sector also turned a profit, with a net profit of 1.4 billion won in the second quarter, aided by cost efficiencies from branch consolidations and improvements in the mobile trading system (MTS).The IB sector reported a net profit of 1.4 billion won in the second quarter, marking a return to profitability compared to the same period last year. This was influenced by stable earnings from the real estate financing business, which was strengthened since the end of last year.Building on the improved performance in the first half, Sangsang Investment & Securities aims to achieve an annual operating profit of over 18 billion won this year. In the second half, the company plans to expand its stock brokerage business targeting institutional investors and improve bond sales performance due to interest rate stability. The newly established derivatives and proprietary stock management team will also be developed as an additional revenue source.Joo Won, CEO of Sangsang Investment & Securities, stated, The consecutive profits in the first half reflect the balanced business portfolio we have built to ensure that our overall revenue structure remains stable even amid market fluctuations. We will solidify this year as a turning point for Sangsang Investment & Securities to return to profitability.* This article has been translated by AI. August 14, 2026 17: -
Chugye University Holds KBO Group Viewing at Jamsil Baseball Stadium Chugye University of Arts created a unique opportunity for students and staff to bond over sports. Breaking away from daily campus life, they united in enthusiastic cheers at the baseball stadium, enhancing their sense of community. On August 13, Chugye University announced that its University Innovation Support Project Team organized a group viewing of the KBO League as part of a cultural experience aimed at helping students settle into university life. Approximately 120 members of the Chugye community attended the event, watching the game between the Doosan Bears and Hanwha Eagles. Students and staff, who typically interact in different academic fields, came together to enjoy the lively atmosphere and connect with one another. This event was specifically designed to promote a stable university experience and foster a sense of belonging and community among students. The initiative was further enhanced by voluntary contributions for tickets and snacks, transforming the event into a cultural experience that bridged gaps between members. Lee Ha-eun, head of the universitys broadcasting department and a student in the Department of Converging Arts, shared her thoughts on the event: I usually have a busy schedule with classes, but cheering together with friends at the baseball game made me feel closer to them. I believe this will be a great memory in my university life. President Lim Sang-hyuk stated, For students to feel a sense of belonging and continue their university life smoothly, it is essential to have not only educational programs but also natural interactions and community experiences among members. I hope this cultural experience serves as an opportunity for students and staff to communicate and feel a sense of connection as part of the university community. We will continue to operate various programs to support student satisfaction and integration into university life.Looking ahead, the University Innovation Support Project Team plans to strengthen collaboration and communication among members to enhance student retention and integration, offering participatory programs in various fields such as culture, arts, and sports.* This article has been translated by AI. August 14, 2026 15:
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Fund inflows defy KOSPI rout, firms turn to banks SEOUL, August 14 (AJP) - South Korean equity funds attracted 11.4 trillion won ($8.0 billion) in fresh money in July despite the steepest stock-market rout since 2008, while corporate bank loans increased by 7.7 trillion won as the bond market remained in net repayment. The benchmark KOSPI plunged 22.2 percent to 6,595 at the end of July from 8,476 a month earlier, marking its worst monthly performance since October 2008, the Bank of Korea said Friday in its monthly financial-market report. The secondary KOSDAQ tumbled 21.4 percent to 720 from 916 as concerns about the artificial-intelligence industry, uncertainty in the Middle East and sustained foreign selling drove a broad market correction. The rout wiped 56.2 trillion won from the net asset value of equity funds, helping push total fund balances at asset managers down by 42.8 trillion won. The decline did not reflect a comparable wave of investor withdrawals, as equity funds received 11.4 trillion won in fresh inflows after valuation changes were excluded, while derivative funds attracted another 8.4 trillion won. Direct stock investment cooled more sharply, with net purchases by individual investors collapsing to 3.4 trillion won from 52.0 trillion won in June and securities investor deposits falling by 17.5 trillion won. The corporate funding market moved in a different direction as bank loans to companies increased by 7.7 trillion won in July, up from 5.1 trillion won in June and more than double the 3.4 trillion won increase recorded a year earlier. Corporate bonds remained in net repayment by 1.9 trillion won after a 2.9 trillion won repayment in June, as higher market rates and the seasonal issuance lull continued to weigh on public bond financing. The cumulative increase in corporate bank loans reached 57.2 trillion won during the first seven months of 2026, up 82.7 percent from 31.3 trillion won a year earlier. Corporate bonds recorded 16.3 trillion won in net repayments over the same period, reversing from net issuance of 5.5 trillion won during the first seven months of 2025. The BOK said loans to large companies increased by 3.8 trillion won as firms continued to borrow working capital to repay bonds and redrew loans temporarily repaid at the end of the second quarter. Loans to small and midsized enterprises rose by 3.9 trillion won on value-added tax payments and expanded lending campaigns by some banks. Market borrowing costs also climbed, with the yield on three-year AA-minus corporate bonds rising to 4.46 percent at the end of July from 4.38 percent a month earlier, while yields on A-minus and BBB-plus debt increased to 5.56 percent and 7.83 percent, respectively. Commercial paper and short-term notes nevertheless swung to net issuance of 4.0 trillion won as quarter-end repayments were reissued, while equity issuance increased to 1.5 trillion won on a large rights offering by a major company. Bank household loans rose by 5.4 trillion won in July, slowing from a 7.6 trillion won increase in June but doubling the 2.7 trillion won gain recorded a year earlier. The cumulative increase in household loans stood at 21.0 trillion won during the first seven months, below 23.2 trillion won a year earlier, but the composition shifted as mortgage growth slowed to 13.3 trillion won from 23.9 trillion won while other household loans swung to a 7.8 trillion won increase from a 600 billion won decline. Bank deposits fell by 30.0 trillion won as quarter-end corporate funds were withdrawn and companies made value-added tax payments, while time deposits increased by 42.3 trillion won and money-market funds gained 27.2 trillion won. July’s data point to a rerouting rather than a uniform withdrawal of money, with fresh cash continuing to enter equity funds while companies leaned more heavily on banks as bond financing contracted. ___________________________________________________________________________________ AJP Takeaways • South Korean equity funds attracted 11.4 trillion won in fresh money in July 2026 even as the KOSPI plunged 22.2 percent and falling valuations erased 56.2 trillion won from equity-fund assets. • Corporate bank loans increased by 7.7 trillion won, more than double the rise a year earlier, while corporate bonds remained in net repayment amid elevated market borrowing costs. • Household-loan growth slowed from June and remained lower on a cumulative annual basis, but borrowing shifted away from mortgages toward other household loans. August 14, 2026 12: -
Korea's fiscal deficit hits 3-year midyear low SEOUL, August 13 (AJP) - South Korea’s managed fiscal deficit narrowed to 84.4 trillion won ($59.6 billion) in the first half, its smallest midyear shortfall in three years, as the semiconductor upcycle and buoyant asset markets helped revive tax receipts and lift government revenue faster than spending. The Ministry of Planning and Budget said Thursday that total revenue rose 19.1 percent from a year earlier to 381.9 trillion won in the January-June period, while expenditure increased 9.4 percent to 425.8 trillion won. The improvement, however, did not reverse Korea’s broader debt buildup. Central government debt remained 70.3 trillion won higher than at the end of 2025 despite declining in June. Revenue and expenditure reached 54.5 percent and 56.5 percent, respectively, of the government’s revised annual plans. Revenue increased 61.3 trillion won from a year earlier, outpacing the 36.6 trillion-won rise in spending by 24.7 trillion won. That narrowed the consolidated fiscal deficit by the same amount to 43.9 trillion won from 68.6 trillion won a year earlier. The managed fiscal balance — which strips out surpluses generated by social security funds such as the National Pension — improved by 9.9 trillion won to a deficit of 84.4 trillion won. The smaller improvement in the managed balance reflected a sharp increase in social security fund surpluses. Those funds posted a combined surplus of 40.5 trillion won, up 14.8 trillion won from a year earlier, widening the difference between the consolidated and managed measures. The first-half consolidated deficit was the smallest since 2019, while the managed deficit was the smallest since 2023. The tax rebound provided the biggest boost to government coffers. National tax revenue climbed 17.4 percent from a year earlier to 223.0 trillion won, adding 33.0 trillion won to revenue in the first half. Tax collections reached 53.7 percent of the government’s revised full-year target. Income tax receipts rose by 10.4 trillion won as higher performance bonuses and payroll income boosted wage taxes, while increased property transactions lifted capital-gains tax revenue. A booming stock market provided another major windfall. Securities transaction tax revenue jumped by 5.2 trillion won to 6.8 trillion won, helped by heavier stock-market turnover and the restoration of transaction tax rates. Value-added tax revenue increased by 4.9 trillion won on higher imports and lower refunds, while corporate tax receipts rose by 4.3 trillion won as company earnings improved. Non-tax revenue increased by 9.0 trillion won to 28.4 trillion won, while income collected through government funds rose by 19.3 trillion won to 130.6 trillion won. Spending also accelerated, though more slowly than revenue. Transfer payments accounted for 33.5 trillion won of the 36.6 trillion-won increase in total expenditure. The ministry attributed part of the rise to an additional 5.1 trillion won in local education grants and earlier payments of government support for the National Health Insurance program. Higher tax revenue automatically raises some education transfers under Korea’s statutory funding formula. The government also spent 4.7 trillion won on relief measures related to elevated oil prices. Spending on programs covered by the government’s accelerated-execution drive increased by 10.1 trillion won to 177.6 trillion won, although the execution rate slipped to 66.5 percent from 69.5 percent a year earlier. Despite the improving fiscal balance, debt remained well above year-end levels. Central government debt stood at 1,338.5 trillion won at the end of June, down 6.8 trillion won from May but up 70.3 trillion won from 1,268.1 trillion won at the end of last year. The ministry said debt typically declines around quarter-end when government bond redemptions exceed new issuance. The outstanding balance of Korean government bonds fell by 4.3 trillion won during June to 1,229.7 trillion won, while housing bonds and foreign-exchange stabilization bonds also declined. Government bond issuance totaled 17.0 trillion won in July, bringing cumulative issuance for the first seven months to 141.1 trillion won, or 63.1 percent of the annual ceiling excluding retail government bonds. The average funding cost rose to 4.07 percent in July from 4.02 percent in June, while foreign holdings of Korean government bonds declined by 500 billion won. AJP Takeaways South Korea’s managed fiscal deficit narrowed to 84.4 trillion won in the first half, its smallest midyear shortfall in three years, as revenue growth outpaced spending. National tax revenue jumped by 33.0 trillion won, helped by stronger income, corporate earnings and booming stock-market turnover. Central government debt eased in June but remained 70.3 trillion won above its end-2025 level, showing that stronger tax receipts have yet to reverse the broader debt buildup. August 13, 2026 11: -
Second Quarter National Budget Deficit Falls to 84.4 Trillion Won, Lowest in Four Years The national budget deficit for the second quarter has dropped below 85 trillion won, marking the lowest figure for June since 2023. This improvement is attributed to increased securities transaction and corporate taxes, driven by a strong semiconductor market and a revitalized stock market.According to the Monthly Fiscal Trends for August report released by the Ministry of Strategy and Finance on August 13, the management fiscal balance recorded a deficit of 84.4 trillion won as of the end of June. This represents an improvement of 9.9 trillion won compared to the same period last year.The management fiscal balance, which excludes social security fund revenues from the consolidated fiscal balance, reflects the governments actual financial status. The consolidated fiscal balance showed a deficit of 43.9 trillion won for the second quarter, while the social security fund recorded a surplus of 40.5 trillion won. This marks the smallest deficit for the consolidated fiscal balance since 2019 and for the management fiscal balance since 2023.Total revenue for the second quarter reached 381.9 trillion won, an increase of 61.3 trillion won compared to the same period last year. This growth is attributed to a rise in national tax revenue (33 trillion won) as well as increases in non-tax revenue (9 trillion won) and fund revenue (19.3 trillion won).National tax revenue increased to 223 trillion won, driven by the strong stock market and semiconductor sector. Income tax (10.4 trillion won), securities transaction tax (5.2 trillion won), value-added tax (4.9 trillion won), and corporate tax (4.3 trillion won) all saw significant increases.Non-tax revenue rose by 9 trillion won compared to the previous year, totaling 28.4 trillion won, while fund revenue reached 130.6 trillion won, an increase of 19.3 trillion won from a year earlier. A Ministry official noted, With the corporate tax interim payment scheduled for August, we expect a temporary improvement in the figures at that time.As of the end of June, cumulative total expenditures amounted to 425.8 trillion won, an increase of 36.6 trillion won compared to the same period last year. Key factors contributing to the rise in fiscal expenditures include support for health insurance finances and compensation for high oil prices.The central governments debt balance stood at 1,338.5 trillion won at the end of June, a decrease of 6.8 trillion won from the previous month. A Ministry official explained, Typically, at the end of the second quarter, the amount of government bond repayments exceeds the amount issued, leading to a decrease in the debt balance.The total revenue progress rate is 54.5%, an improvement of 4.2 percentage points compared to the same period last year. Notably, the progress rate for non-tax revenue increased by 13.5 percentage points, driving the overall growth rate.* This article has been translated by AI. August 13, 2026 10:
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Demand for Korea's 1-yr central bank bond hits 29-mo low SEOUL, August 12 (AJP) - Demand for South Korea's one-year central bank bond fell to a 29-month-month low Wednesday as bids missed the planned issuance, signaling that the enlarged supply could not clear at the yield the Bank of Korea was prepared to pay. The weakness lay not in participation but in the size of the bids, as 15 institutions took part, one more than in July, even as their combined orders fell 41.2 percent. The BOK received 500 billion won in bids for 700 billion won ($494 million) of one-year Monetary Stabilization Bonds, producing a bid-to-cover ratio of 71.4 percent, according to the auction results. It awarded 410 billion won to 12 institutions at a yield of 3.350 percent, leaving the final issuance at 58.6 percent of the planned amount. Bids ranged from 3.150 percent to 3.450 percent, with no partial award. At the July auction, 14 institutions submitted 850 billion won of bids for the same 700 billion won offering, allowing the BOK to issue the full amount at 3.370 percent. The average bid per participating institution therefore fell 45.1 percent in one month to 33.3 billion won from 60.7 billion won. An AJP review of 339 one-year MSB auctions since 2010 found Wednesday's bid ratio was the eighth lowest over the period and the weakest since March 2024. It was also the third undersubscribed auction in the past 12 months, following bid ratios of 97.1 percent in September 2025 and 77.1 percent in October. A 2021 Capital Market Research Institute study found that one-year MSB auctions recorded an average bid ratio of 222.6 percent over the preceding decade and fell short of planned issuance in only 5.3 percent of cases. Part of the latest decline may reflect the larger offering, as the BOK raised planned one-year issuance from 500 billion won in June to 700 billion won in July and August. That explanation is limited, however, by the July comparison, when the same amount attracted 350 billion won more in bids. The result points most directly to a pricing gap between the return investors required and the yield the central bank was prepared to accept. The 3.350 percent accepted yield was the cutoff for the 410 billion won awarded, rather than the market-clearing yield for the entire 700 billion won offering. Even if the BOK had accepted every submitted bid, the auction would still have fallen 200 billion won short, suggesting that full issuance may have required a higher yield capable of drawing additional demand or a smaller offering. The auction alone, however, cannot determine whether the gap reflected expectations of higher market rates, more attractive returns on competing short-term debt or constraints on institutions' investment capacity - according to the central bank. The result came two days after the BOK announced changes intended to improve MSB liquidity, including extending the fungible issuance period for one-year bonds to three months from two and introducing benchmark issues from Aug. 31. Because Wednesday's auction was conducted under the existing framework, sales after the changes take effect will provide the next test of whether greater tradability can revive demand or investors continue to require higher yields. __________________________________________________________________________________ AJP Takeaways The bid ratio for the BOK's one-year Monetary Stabilization Bond fell to 71.4 percent, the lowest in 29 months and the eighth lowest among 339 auctions since 2010. Participation rose to 15 institutions from 14 in July, but total bids dropped 41.2 percent and the average amount per participant fell 45.1 percent. The auction points to a pricing gap rather than a broad market shock, with post-Aug. 31 sales set to test whether improved liquidity can restore demand without higher yields. August 12, 2026 16: -
KB Kookmin Bank Adds Time Deposits to KPI Amid Growing Deposit Competition KB Kookmin Bank is expected to intensify competition for deposits as it has added time deposits to its key performance indicators (KPI) for the second half of the year. With the Bank of Korea raising its benchmark interest rate, market interest rates are increasing, leading banks to seek relatively stable deposit sources.According to the financial sector on August 12, KB Kookmin Bank has newly included personal and corporate time deposits in its KPI announced earlier this month. This temporary measure will reflect the performance of branch offices and employees in attracting time deposits until the end of the year, aiming to proactively secure deposits.Other banks are also working to attract customers by raising deposit interest rates. Shinhan Bank, which had suspended special time deposit products for two years, is currently running its sixth special offer this year. The maximum interest rate has increased from 3.1% in the first special offer to 3.5% in the fifth and sixth offers, a rise of 0.4 percentage points.Woori Bank has launched the Our Wish Time Deposit to commemorate the 150th anniversary of the birth of Kim Gu and Liberation Day, offering a maximum interest rate of 3.4% for a December maturity. Hana Bank raised the base interest rates of 14 deposit products, including six types of time deposits and seven types of savings accounts, by 0.2 to 0.3 percentage points at the end of last month.While banks are employing various strategies, from branch evaluations to special offers and interest rate hikes, they are mobilizing all means to secure deposits.The push for time deposits is driven by the need to establish a stable funding base proactively. Unlike demand deposits, time deposits tie up funds for a specified period, reducing the risk of fund outflows and making it easier for banks to predict the scale and maturity of their funding. This is also significant as it allows banks to secure stable deposits that can be used for future lending.The increased reliance on market-based funding in the banking sector is another factor contributing to the competition for deposits. While banks are raising funds through bond issuances, the rising market interest rates can increase their funding costs. In contrast to market-based funding, which can fluctuate based on financial market volatility, time deposits provide a more stable source of funding. In a situation where reliance on market-based funding has increased, banks are looking to secure more stable deposit sources.The possibility of further increases in deposit interest rates due to the benchmark rate hike is also prompting banks to act. The Bank of Korea raised the benchmark rate from 2.50% to 2.75% last month. As banks prepare for the potential of higher deposit rates and increased market-based funding costs, competition to secure deposits is expected to continue.A banking sector official stated, In a situation where market interest rates are rising, deposit rates will inevitably follow suit, and the more unstable the flow of funds in the financial market, the more important it is for banks to secure a stable deposit base. This trend is likely to continue for the time being.* This article has been translated by AI. August 12, 2026 15:
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Na Young-seok Leads New Netflix Show Featuring Unwilling Hikers My ambition is to create a next-generation group that will lead Korean entertainment for the next 10 years. (Na Young-seok)Na Young-seok has returned, leading a group of young stars into the rugged mountains. His new Netflix variety show, Why Are We Hiking? captures the raw survival experiences of four reluctant hikers who have spent their lives avoiding the outdoors.On August 12, a production presentation for Why Are We Hiking? (referred to as Dae-dung-why) was held at Hotel Naru Seoul M Gallery in Mapo-gu, Seoul. Attendees included Na Young-seok, fellow producer Park Hyun-yong, singer Car the Garden, Day6s Do-woon, actor Lee Chae-min, and All Day Projects Tarzan.Set to premiere on August 18, the 10-episode series follows four individuals who have never shown interest in hiking as they embark on their first winter mountain expedition. This real hiking variety show promises to deliver authentic experiences.Na Young-seok expressed his excitement about the new project and his strong trust in the cast. He stated, Every time I launch a new program, I feel both excited and worried, but I believe that the essence of variety shows lies in the characters. It’s a great fortune to work with this new crew of four.Dae-dung-why features a fresh combination of cast members, including Car the Garden, Do-woon, Lee Chae-min, and Tarzan, which has generated buzz since the planning stages. Na explained his casting choices, saying, I wanted to find hidden gems among new faces that no one has touched before, eliciting reactions like, Did that person have such a sense of humor?Initially, the production team planned a typical variety show with light games and travel. However, after conducting pre-interviews, they recognized the casts hidden potential and character, prompting a shift in the programs direction.Na noted, I was curious about the chemistry that would emerge in a more challenging environment, which can only be experienced at this youthful age, so I chose hiking as the theme.Co-director Park Hyun-yong also highlighted the unexpected changes in relationships that arise from forced hiking. He shared, I once went hiking with Na Young-seok under the influence of writer Lee Woo-jung, and I found that enduring a tough experience together led to more conversations and stronger bonds. I even hid the hiking aspect from the cast when I recruited them. I wanted to capture the genuine struggles of young people facing the harsh winter mountains.Under the meticulous planning of the production team, the cast began their journey with a climb of Seoraksan in temperatures below -20 degrees Celsius, followed by early morning hikes on Taebaeksan and a trek on Hallasan, tackling some of South Koreas most challenging mountains. Na believes that this rugged backdrop will provide fresh viewing experiences for global audiences. He remarked, Its rare to find such steep and treacherous terrain, along with blizzards, anywhere else in the world. Domestic viewers will resonate deeply, while international audiences will be curious about Koreas captivating mountains.Park also pointed out that the culture of enjoying kimbap and ramen at the mountain summit is a unique aspect of Korean hiking culture, which serves as another highlight of the program.The candid hiking experiences of the four reluctant hikers brought laughter to the event. Instead of romanticizing the allure or sense of achievement in hiking, they shared their honest feelings about the physical challenges they faced, hinting at the genuine reactions that will be featured in the show.As the eldest and leader of the group, Car the Garden humorously stated, Every time I climbed, my only thought was, I just want to get down quickly. Day6s Do-woon echoed this sentiment, saying, I wanted to descend immediately upon arrival, and the way down felt endless. It was a uniquely charming hiking experience.The youngest member, Lee Chae-min, reflected on moments of brief inspiration amid physical pain. He shared, I thought it would be really tough from the start, but it was so exhausting that I couldnt even express how heavy my legs felt. However, I will always remember the moment I reached the summit of Hallasan and saw the sea of clouds. It was a special gift, but I still wanted to get down just like the others. Tarzan added, I endured the climb thinking about the food I could eat at the summit. That sincerity alone helped me finish the hike.The contrast between the producers romantic expectations and the casts reality became a strong asset for Dae-dung-why. Na expressed satisfaction with how the cast broke traditional variety show norms in the mountain setting.He said, I secretly hoped that the four misfits would start off grumbling but gradually discover the joy of the mountains and bond deeply at the summit. However, times have changed. Car the Garden, despite being the leader, embodied the modern person who only thought of himself without any leadership qualities.He continued, In past variety shows, participants would cry tears of emotion while watching a majestic sunrise, but these friends shouted, I don’t want to see that. I believe that genuine reactions like these reflect the codes of todays generation. I take pride in the unique variety show that has emerged from their raw experiences.At the end of the presentation, the cast shared witty remarks to entice potential viewers.Car the Garden said, If you all watch diligently and Na PD decides to send us hiking again, I won’t be able to refuse. For those who dislike me, this is the perfect program to enjoy while lounging at home and laughing at others struggles.Do-woon reflected, It was tough to climb, but the filming team captured the visuals beautifully. It was a learning experience about what professionalism is. Lee Chae-min added, The beautiful snowy mountain scenery will surely cool you down on a hot summer day when watched from a cool room. Tarzan also commented, Watching four transparent guys climbing snowy mountains will be genuinely entertaining. I’ll try to avoid hiking next time, but I hope for your continued support.The Netflix variety show Why Are We Hiking? intertwines the unfiltered survival stories of youth with the stunning scenery of snowy mountains, premiering for global audiences on August 18.* This article has been translated by AI. August 12, 2026 12:
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Market Preview: Investors Await U.S. CPI; Will Semiconductor Stocks Provide Support? As investors await the release of the U.S. Consumer Price Index (CPI) for July, global markets are exhibiting a cautious stance. Domestic markets are expected to be influenced by rising international oil prices and weakness in major U.S. tech stocks. However, the increase in the Philadelphia Semiconductor Index and ongoing demand for artificial intelligence (AI) infrastructure may limit downward pressure on the domestic market, which is also experiencing reduced volatility.On August 11, U.S. stocks fell as caution grew ahead of the CPI announcement. The Dow Jones Industrial Average dropped 0.34% to close at 53,791.85. The S&P 500 fell 0.32% to 7,728.20, while the Nasdaq Composite declined 0.60% to finish at 26,445.45. In contrast, the Russell 2000 index, which focuses on small-cap stocks, rose by 0.32%.Market sentiment was cautious ahead of the inflation data. Following disappointing employment figures last week, interest in the Federal Reserves monetary policy trajectory has increased, making this CPI report a key variable for the upcoming Federal Open Market Committee (FOMC) meeting in September.The consensus for the July CPI is a year-over-year increase of 3.4% for the headline figure and 2.5% for core inflation. Month-over-month, a rise of 0.1% for the headline and 0.2% for core inflation is anticipated. After a 0.4% decline in the headline CPI in June and a flat core CPI, a normalization of prices is expected for July.Rising international oil prices pose a burden in terms of inflation and interest rates. Negotiations between the U.S. and Iran regarding the reopening of the Strait of Hormuz have shown little progress, leading West Texas Intermediate (WTI) crude to rise by $1.07 (1.30%) to $83.20 per barrel. Brent crude increased by $1.23 (1.40%) to $88.91.The yield on the U.S. 10-year Treasury note fell by 1.8 basis points to 4.6883%, but remains at a high level. If oil prices continue to rise, concerns about future inflation may increase, limiting the potential for interest rate declines and putting pressure on risk assets.According to Seo Sang-young, a researcher at Mirae Asset Securities, “This consumer price index could lead to changes in monetary policy, making it highly relevant for the short-term bond, foreign exchange, and stock markets. If a higher-than-expected core CPI is reported, it could reignite concerns about interest rate hikes, especially in light of recent inflation warnings from Fed officials.”He added, “Conversely, if lower-than-expected inflation is confirmed, it could ease interest rate pressures. However, the persistence of high international oil prices suggests that concerns about future inflation will remain, potentially limiting stock market gains.”Despite the declines in the U.S. stock market, the relatively small drop is seen as a positive sign. While major tech stocks struggled, the Russell 2000 index rose, and the Philadelphia Semiconductor Index increased by 0.87%. Notably, Micron Technology gained 0.87%, and AMD rose by 1.01%. The American Depositary Receipts (ADRs) of SK Hynix, closely tied to the domestic market, surged by 4.70%.The rise in SK Hynix ADRs was bolstered by news of increased stakes in Kioxia and the reopening of its factory in Dalian, China. The expectation that SK Hynix could become the largest shareholder in Kioxia, thereby expanding its influence in the global NAND market, along with the resumption of construction and investment at its subsidiary Solidigms Dalian plant, was positively received.Investment demand for AI infrastructure remains strong. Nvidia has formalized a financial consortium for AI infrastructure worth up to $500 billion, involving firms such as Apollo Global Management, Blackstone, BlackRock, Brookfield Asset Management, Goldman Sachs, and KKR. This indicates that AI investments are expanding beyond semiconductors and AI model development to include data center and power grid construction, highlighting the importance of large-scale funding.While Nvidias stock dipped by 0.02%, related power infrastructure stocks performed well. Constellation Energy rose by 2.93%, Eaton by 3.22%, and Vertiv Holdings by 4.34%. Oclaro and NuScale Power also saw increases of 5.66% and 7.73%, respectively. The growing demand for power due to the expansion of AI data centers is driving investment momentum in related sectors.AI-related companies such as CoreWeave and Supermicro have shown strong performance in after-hours trading, with gains exceeding 13% and 6%, respectively, following their earnings reports, which is a favorable factor for the domestic AI and semiconductor value chain.Additionally, the reduction in volatility in the KOSPI is seen as a positive development. According to Kiwoom Securities, the VKOSPI, which indicates future expected volatility for the KOSPI, averaged around 85 points in June and July, peaking at 95 points during a sharp decline at the end of June. However, it has dropped to the 70-point range in August, reaching a low of 61 points on August 11, the lowest since May 8.Han Ji-young, a researcher at Kiwoom Securities, noted, “While a VKOSPI in the 60-point range is still relatively high, the recent decline in VKOSPI during the market recovery suggests that the supply stress that led to the volatility spike in July is easing. It is important to recognize that abnormal volatility is normalizing ahead of stock prices.”* This article has been translated by AI. August 12, 2026 08:
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Korea's won, bonds buck global trend after stocks dominate H1 SEOUL, August 11 (AJP) - The KOSPI and chip stocks sucked up capital and attention in the first half, but as the second half gets under way, it is the Korean won and bonds that are bucking the global trend and gaining ground. Whether that strength can last is less certain. Their divergence from U.S. markets rests partly on short-covering in bonds and expectations of corporate dollar conversions supporting the won — forces that could prove temporary. The U.S. 10-year Treasury yield rose from 4.562 percent on July 10 to 4.713 percent on Aug. 10, an increase of 15.1 basis points. Over the same period, the equivalent yield rose 4.7 basis points in Japan and just 2.0 basis points in Korea. The currency move was even more striking. USD/KRW fell 5.8 percent over the period, while USD/JPY declined 2.0 percent, meaning the won appreciated nearly three times as much against the dollar as the yen did. That marks a sharp reversal from the first half, when the greenback gained 7.7 percent against the won, more than double its 3.5 percent advance against the yen. The rise in U.S. Treasury yields reflected mounting concerns over inflation, oil prices, the fiscal deficit and debt supply. The 30-year Treasury yield climbed to around 5.25 percent on Aug. 10, near its highest level in 19 years. Korea did not escape those pressures. But a sharp reversal in domestic positioning prevented them from feeding fully into Korean government bond yields. After the Bank of Korea raised its base rate from 2.50 percent to 2.75 percent on July 16, foreign investors initially positioned for further tightening. They subsequently reversed course, making net purchases of 137,410 three-year bond futures contracts over 12 consecutive sessions from July 23 through Aug. 7. The three-year Korean government bond yield fell from 3.959 percent to 3.669 percent during that period even as U.S. Treasury yields headed higher. The move points largely to short-covering rather than a fresh wave of long-term bond buying, leaving the market vulnerable once investors finish unwinding positions built around expectations of additional BOK tightening. Korea’s phased inclusion in the FTSE World Government Bond Index, which began in April, has provided a more durable source of demand and helped cushion the bond market. But foreign net investment in Korean bonds slowed to 0.8 trillion won in July from 4.5 trillion won in June, suggesting WGBI-related demand alone cannot explain the recent resilience. BOK research also indicates that much of the overseas passive money tracking bond indexes is currency-hedged, weakening the direct link between WGBI inflows and won appreciation. The currency has instead drawn support from Korea’s swelling export income. The country posted a record $49.73 billion current-account surplus in June, lifting the first-half surplus to $191 billion. Exporter dollar sales have been reinforced by expectations that part of the $26.5 billion raised through SK hynix’s U.S. American depositary receipt offering will eventually be converted into won to finance investment at home. No specific SK hynix conversion has been confirmed. But expectations of additional dollar supply were strong enough to help offset $4.6 billion of Korean retail purchases of U.S. stocks in July and 8.8 trillion won of foreign selling in Korean equities. The mystery is that money has been flowing out through overseas stock purchases and foreign equity selling, yet the won has strengthened sharply. The next complication comes from the BOK. Senior Deputy Governor Ryoo Sang-dai said Tuesday that another rate increase was likely unless an extraordinary shock intervened, arguing that stronger domestic demand would generate gradual but persistent inflation pressure. The remarks were explicitly his personal view. Ryoo is also due to retire on Aug. 20, before the BOK’s Aug. 27 policy meeting, meaning he will not vote on the next decision and limiting the remarks' direct policy weight. Markets nevertheless took notice without treating them as a new shock. The three-year Korean government bond yield closed 3.6 basis points higher at 3.812 percent but remained below its intraday high of 3.831 percent, suggesting Ryoo largely confirmed expectations already embedded in the market. Pressure was greater at the long end. The 10-year yield gained 6.2 basis points to close near its session high at 4.303 percent as higher U.S. yields and oil prices exerted greater pressure, steepening the Korean yield curve. The won strengthened as far as 1,412.24 per dollar before giving back some gains to trade around 1,417 late Tuesday. For Korea’s bond and currency markets, the question is now whether a move born partly from positioning and expectations can turn into something more durable. U.S. inflation and oil prices will test the global side of that divergence, while the BOK’s Aug. 27 meeting will test the domestic side. ___________________________________________________________________________________ AJP Takeaways • South Korea’s market momentum shifted from KOSPI and semiconductor stocks in the first half to the Korean won and government bonds in early second-half trading. • From July 10 through Aug. 10, Korea’s 10-year government bond yield rose just 2.0 basis points, compared with increases of 15.1 basis points in U.S. Treasuries and 4.7 basis points in Japan, while the won appreciated nearly three times as much as the yen. • Korean government bonds were supported by foreign short-covering in three-year futures and phased FTSE World Government Bond Index inclusion, although weaker July bond inflows suggest that support may fade as positions normalize. • The won drew strength from Korea’s record $49.73 billion June current-account surplus, exporter dollar sales and expected conversions of SK hynix’s $26.5 billion ADR proceeds, rather than mainly from currency-hedged WGBI inflows. • Ryoo Sang-dai reinforced expectations of another BOK rate increase, but his Aug. 20 retirement and the limited three-year yield reaction reduced the remarks’ direct market impact, leaving U.S. inflation, oil prices and the Aug. 27 BOK meeting as the next tests. August 11, 2026 17: -
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 years 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. August 11, 2026 16:
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National Pension Fund's New Scoring System Attracts Financial Firms to Jeonju Financial companies are increasingly establishing offices in Jeonju, where the National Pension Service (NPS) is located. The NPS has decided to award additional points in its evaluation of asset management firms based on their operational base in Jeonju, prompting financial firms to expedite their move to the city.According to the financial sector and the NPS on August 11, NH Nonghyup Financial plans to open its Jeonju office for NH-Amundi Asset Management on September 1. This follows the establishment of bases in Jeonju by KB, Shinhan, and Woori Financial, with NH Nonghyup also joining the trend. The company aims to build an NH Financial Hub centered around the Jeonju office and expand collaboration with the NPS.IBK Asset Management, a subsidiary of IBK Industrial Bank, also opened its Jeonju office on the same day. IBK Asset Management is a comprehensive asset management firm wholly owned by IBK Industrial Bank.The influx of financial firms into Jeonju is largely due to changes in the NPSs evaluation criteria for asset management firms. In June, the NPS introduced a new criterion for selecting domestic equity and bond management firms, granting an additional point to those with operational bases in Jeonju. This change was implemented about six months after President Lee Jae-myung instructed the NPS to consider providing incentives to regionally based asset management firms during the asset allocation process.As of the end of May this year, the NPS manages a fund totaling 1,848 trillion won, with 959 trillion won entrusted to domestic and foreign asset management firms. Being selected as a management firm for the largest institutional investor in the country is directly linked to the firms performance. Industry experts note that even a single additional point can significantly impact rankings, which can be determined by fractional score differences.Major asset management firms have already begun their moves to Jeonju. Shinhan Asset Management opened its Jeonju office in February, while KB Asset Management moved into the Jeonbuk KB Financial Town in July. Woori Asset Management has also established a base in Jeonju.International firms are not exempt from this trend. Blackstone and PIMCO already have offices in Jeonju, and BlackRock and Starwood Capital opened their Jeonju offices this year.A source in the financial sector stated, For financial firms, securing a connection with the NPS in Jeonju is becoming a significant competitive advantage. It is highly likely that more financial companies will establish local bases to strengthen collaboration with the NPS in the future. August 11, 2026 14:
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SK hynix emerges as a whale in Korea's thin debt waters SEOUL, August 10 (AJP) - SK hynix, a dominant force in South Korea’s stock market, is now looming large over its debt market as its AI-fueled cash bonanza gives the chipmaker the deep pockets to gobble up entire bond offerings. Market participants estimate its purchases of bonds and commercial paper this year at as much as 40 trillion won ($28.2 billion), with individual orders reportedly ranging from 100 billion won to 300 billion won. In some cases, SK hynix has taken entire offerings. The company has not disclosed its fixed-income portfolio, while issuers and underwriters involved have declined to comment. Without a disclosed portfolio or calculation method, it remains unclear whether the widely cited 40 trillion won figure represents outstanding holdings or cumulative transactions. Market reports indicate the buying began in February and accelerated around April, months before SK hynix raised about $26.5 billion through an American depositary receipt offering in July, ruling out the new share proceeds as the source of its earlier investments. Most of the money has flowed into debt rated AA or higher with maturities of three years or less, including bonds issued by public corporations, banks, financial holding companies, brokerages and credit-finance firms, along with commercial paper. Market estimates include about 2.7 trillion won of Korea Electric Power Corp. bonds, 1.4 trillion won of NH NongHyup Bank debt and 1.05 trillion won of Shinhan Bank bonds. SK hynix is also reported to have absorbed the entire 1.26 trillion won long-term commercial-paper offering by Mirae Asset Securities. A short-term funding-market source cited in local reports said deals often begin with SK hynix asking issuers whether they have debt matching its preferred maturity and credit quality, sometimes ending with the chipmaker taking the entire offering. Much of the investment is believed to have been made through trust accounts at five large brokerages in a reverse-inquiry process, under which issuers structure debt around the buyer’s requirements. That buying power is beginning to change the way Korea’s primary credit market operates. An asset manager who requested anonymity said issuers increasingly check SK hynix’s appetite before approaching broader investors, effectively reducing the amount of new debt available to others. There is no comprehensive data, however, showing how far its purchases have moved yields or credit spreads. A bond broker said SK hynix has eased placement pressure for issuers in the primary market but done little to revive secondary-market trading, while there is limited evidence that the liquidity has filtered down to lower-rated borrowers. Its deep pockets are therefore reinforcing rather than breaking Korea’s existing credit divide. Public corporate bond issuance totaled 2.96 trillion won in July, down 16.1 percent from June and 37.5 percent from a year earlier, according to the Korea Financial Investment Association. Refinancing accounted for 96.1 percent of proceeds, while more than 90 percent of issuance carried maturities of two or three years. Financial companies accounted for 61.9 percent of July issuance. BBB+ rated Hanjin was the only BBB-rated borrower to conduct public bookbuilding during the month, and its one-year tranche fell short of its target, in sharp contrast with oversubscribed offerings from AA-rated companies. SK hynix’s demand fits neatly into that market: short-term, highly rated debt carrying relatively little credit risk. Behind its growing clout is a cash pile swollen by the unprecedented profitability of AI memory. SK hynix reported 88 trillion won in cash and cash equivalents at the end of June, up 33.6 trillion won in just three months. Total debt fell to 18.6 trillion won, leaving net cash of 69.4 trillion won. First-half operating profit approached 100 trillion won as booming demand for high-bandwidth memory used in artificial-intelligence accelerators transformed the chipmaker’s balance sheet. The company is also said to be considering a roughly $3 billion stake sale in its chip facility in Chongqing, China, while the value of its holding in Japanese NAND flash maker Kioxia has risen sharply with the broader AI memory boom. Its July ADR offering added another enormous pool of capital, although SK hynix has said those proceeds will primarily fund the Yongin semiconductor cluster, its Cheongju P&T7 advanced-packaging plant and extreme-ultraviolet equipment. Only part of the proceeds will be converted into won, and the company has not disclosed the amount or timing. Nor has SK hynix stopped spending heavily on its core business. Its board on Friday approved 54.3 trillion won in investment for two new fabs — 35.2 trillion won for its Y2 plant at the Yongin semiconductor cluster and 19.1 trillion won for the M17 fab in Cheongju. The projects underline the unusual scale of the company’s current financial firepower: SK hynix is simultaneously pouring tens of trillions of won into new semiconductor capacity while emerging as one of the most aggressive cash investors in Korea’s credit market. Its reach could expand further. SK hynix has advertised treasury positions covering Korean government bonds, corporate debt and short-term instruments, prompting market participants to view sovereign debt as another possible destination for its cash. No government-bond purchases have been confirmed. For now, perhaps the clearest sign of SK hynix’s growing influence is what happens when it briefly steps away. Reports that some credit-finance companies scrambled for alternative buyers when the chipmaker slowed its investment toward the end of June suggest its treasury schedule is already becoming a market variable in its own right. After becoming one of the names that can swing Seoul’s stock market, SK hynix is increasingly becoming a name Korea’s debt market cannot ignore. __________________________________________________________________________________ AJP Takeaways • SK hynix has emerged as a major buyer of short-dated, high-grade Korean bonds and commercial paper, with 2026 purchases estimated at up to 40 trillion won. • Its buying is helping top-rated issuers place new debt but doing little to ease financing pressure on lower-rated borrowers. • With 88 trillion won in cash and massive AI earnings, SK hynix’s treasury decisions are becoming an increasingly important variable across Korea’s credit market. August 10, 2026 17: -
Korean investors return to U.S. stocks without deserting KOSPI SEOUL, August 10 (AJP) -South Korea’s campaign to draw investor money back home has failed to break the country’s appetite for U.S. stocks, with overseas buying resuming in June and accelerating through early August, even without easing up on buying at home. Nonfinancial corporations and other investors — a Bank of Korea category that includes households and companies outside the financial sector — sold a net $525.7 million of overseas equities in the second quarter, their first quarterly net sale in 10 quarters. That marked a sharp reversal from the first quarter, when the group bought a net $9.91 billion of overseas equities after purchasing $14.69 billion in the final quarter of 2025. But the retreat proved short-lived. The group sold $424.9 million in April and $605.5 million in May before returning to a net purchase of $504.7 million in June, showing that the quarterly pullback was concentrated in the first two months. Institutional investors kept up buying overseas. General government entities purchased a net $7.20 billion of foreign equities during the quarter, deposit-taking institutions $786 million and other financial institutions $13.57 billion. The April-May retreat came as Korean stocks rallied, expectations grew for tax incentives under the Reshoring Investment Account and the won hovered near 1,500 per dollar, making domestic equities relatively more attractive while raising the cost of buying assets abroad. Korea Securities Depository data compiled by AJP showed Korean investors settled $33.84 billion of foreign equity purchases against $28.61 billion of sales between July 1 and Aug. 7, leaving net buying of $5.23 billion. Virtually all of it went into U.S. equities. U.S. stocks drew a net $5.25 billion during the period — $4.64 billion in July and another $609.1 million through Aug. 7 — while all other overseas markets combined recorded a net $26.1 million sale. Still, the renewed U.S. buying did not come at the expense of Korean stocks. An AJP aggregation of daily Korea Exchange data showed retail investors bought a net 13.52 trillion won ($9.56 billion) of individual KOSPI and KOSDAQ shares between July 1 and Aug. 7. That included 5.04 trillion won in July and 8.48 trillion won in just the first seven days of August. The parallel buying suggests Korean investors are not simply shifting money back and forth across the Pacific. They are adding exposure on both sides. Demand also extended beyond equities. Korean investors settled $9.44 billion of overseas bond purchases and $5.74 billion of sales during the July 1-Aug. 7 period, producing net buying of $3.71 billion. The domestic and overseas figures are not directly comparable. Korea Exchange data cover retail transactions in individual KOSPI and KOSDAQ shares and exclude exchange-traded funds and Nextrade transactions, while the overseas figures cover settlements by Korean investors more broadly. The BOK is due to publish its July balance-of-payments report on Sept. 4, offering the first official indication of whether the renewed overseas buying is also visible in data compiled on a consistent investor and accounting basis. August 10, 2026 14: -
BOK revamps monetary bonds as market liquidity thins SEOUL, August 10 (AJP) - The Bank of Korea is out to sharpen the appeal of its policy bonds by concentrating issuance into fewer, larger benchmark securities, as outstanding central-bank debt falls below 100 trillion won ($70.6 billion) while government bonds increasingly dominate Korea’s public fixed-income market. The overhaul will also divide early redemptions into a predictable schedule and a more discretionary operation, giving the central bank greater flexibility to manage bank reserves as Korea’s liquidity conditions become less one-sided. Monetary stabilization bonds, or MSBs, are debt securities issued by the BOK to drain reserves from the financial system. Issuance withdraws liquidity, while maturity payments and early redemptions return funds to the market. The bonds have historically played an unusually prominent role in Korea because the central bank used them to sterilize liquidity generated by current-account surpluses, capital inflows and the accumulation of foreign-exchange reserves. That environment has shifted as rising demand for banknotes, larger statutory reserve requirements and the BOK’s foreign-exchange swaps with the National Pension Service have reduced the amount of excess reserves that must be absorbed. Outstanding MSBs fell from 107.29 trillion won at the end of last year to 95.16 trillion won in March, dropping below the 100 trillion-won mark for the first time since 2003. The declining stock has added urgency to a longstanding liquidity problem. Research by the Korea Capital Market Institute found that MSBs trade less actively than Korean government bonds and that turnover drops sharply after the first month following issuance. The BOK will extend the fungible issuance period for one-year MSBs to three months from two, reducing the number of new one-year securities created each year to four from six. The new securities will be dated March 1, June 1, Sept. 1 and Dec. 1, replacing the current cycle of six issue dates. Concentrating issuance over a longer period should increase the amount outstanding in each security and make it easier to trade without moving prices sharply. The most recently auctioned coupon bond in each of the one-, two- and three-year maturities will also be designated as the benchmark issue and identified in the BOK’s monthly issuance plan. The designation is intended to give investors a clearer reference price for each maturity, although it does not by itself guarantee deeper trading. Unlike primary dealers in the Korean government bond market, MSB participants are not required to provide continuous exchange quotes, and most transactions take place over the counter. The BOK said it would work with relevant institutions on further measures to promote trading in the benchmark issues. Early redemptions will be separated into two operations. A first-Tuesday operation will cover three securities selected according to a predetermined remaining-maturity schedule, while a third-Tuesday operation will cover about three securities chosen each month according to reserve and market conditions. The BOK has already conducted two buybacks in some recent months, but the overhaul formalizes the arrangement and separates predictability from discretion. Uneven demand was evident in an Aug. 7 operation, when one one-year security attracted no bids even though total offers exceeded the planned purchase amount. The approach brings the MSB market closer to the logic underpinning Korea's much larger Treasury market, where liquidity tends to concentrate in benchmark securities. The contrast between the two markets is becoming more pronounced. While MSBs are shrinking, Korean government bonds are becoming more deeply integrated into global fixed-income portfolios following Korea's entry into the FTSE World Government Bond Index. South Korean government bonds began entering the WGBI in April this year, with inclusion being carried out in eight monthly stages through November. That process is increasing the importance of deep liquidity and reliable benchmark pricing in the Treasury market as index-tracking global investors allocate money to Korean sovereign debt. Rather than competing with government bonds for scale, the BOK is trying to ensure that its smaller pool of central-bank securities does not become fragmented into increasingly illiquid individual issues. Unlike primary dealers in the Korean government bond market, MSB participants are not required to provide continuous exchange quotes, and most trading takes place over the counter. The BOK said it would therefore work with relevant institutions on additional measures to promote transactions in designated benchmark issues. The overhaul also changes the other side of the MSB market — how the BOK takes its securities back before maturity.Early redemptions will be divided into two operations. A first-Tuesday operation will cover three securities selected according to a predetermined remaining-maturity schedule, giving investors greater certainty over which bonds are likely to be bought back. A third-Tuesday operation will cover around three securities selected each month according to reserve conditions and market circumstances, preserving the BOK's ability to inject liquidity where it considers necessary. The central bank has already conducted two buybacks during some recent months, but the new system formalizes the arrangement and draws a clearer distinction between predictable market operations and discretionary liquidity management. In an Aug. 7 early-redemption operation, one one-year security received no bids even though aggregate offers across the operation exceeded the BOK's planned purchase amount, illustrating how liquidity and investor demand can vary sharply between individual MSB issues. The reform also reflects a broader transformation in the way the BOK manages reserves. A falling MSB balance does not necessarily imply easier monetary policy. The BOK raised its base rate by 25 basis points to 2.75 percent on July 16, even as the amount of structural excess liquidity requiring absorption has declined. The two developments highlight the distinction between setting the price of money through the policy rate and managing the quantity of reserves through MSBs, repurchase agreements and other open-market operations. As reserve conditions become more balanced, the BOK increasingly needs the ability to both absorb and supply liquidity rather than operating primarily in one direction. The BOK will move its one-year auction from the second Wednesday of each month to the first and shift the two-year auction in the opposite direction. The changes take effect Aug. 31 and will be reflected in the September issuance plan scheduled for Aug. 27. ___________________________________________________________________________________ AJP Takeaways The BOK will reduce the number of new one-year MSB issues to concentrate liquidity in larger benchmark securities. Early redemptions will combine a fixed schedule with a flexible monthly operation to improve reserve management. The reform addresses market liquidity but stops short of replacing MSBs with repurchase agreements. August 10, 2026 12: