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Low PBR Companies: Sector Analysis Reveals Varied Thresholds The inclusion of companies in the low PBR list varies significantly by sector, even when the price-to-book ratio (PBR) is the same. This is due to differences in assets, profitability, and future value across industries. Both the steel and finance sectors are categorized as low PBR industries, but the threshold for the bottom 25% is much higher in finance. Thus, the fortunes of companies will likely diverge based on their relative standing within their respective sectors.According to data from the Korea Exchanges listing disclosure system KIND, calculated in June, the bottom 25% PBR thresholds for various sectors were approximately 0.26 for materials and 0.42 for finance. The thresholds for industrial goods, consumer staples, and consumer discretionary were 0.35, 0.36, and 0.28, respectively.In contrast, the technology sector had a higher threshold of 0.57, followed by communication services at 0.50 and healthcare at 0.46. The energy, utilities, and real estate sectors were around 0.23. This indicates that the bottom thresholds for technology and materials sectors differ by more than double. However, these preliminary figures based on June data may differ from the actual counts by the Korea Exchange.The government aims to address chronic undervaluation in the domestic stock market through the announcement of low PBR companies. However, it has applied a relative evaluation method by sector, considering the different asset compositions and business structures. Generally, a PBR below 1 indicates that the market values the company less than its net assets. Nonetheless, evaluations can vary based on sector-specific factors such as asset quality, profitability, and market conditions.In the materials sector, major corporations exhibited notably low PBRs. Hyundai Steel recorded a PBR of 0.19, Lotte Chemical at 0.20, and Taekwang Industrial at 0.16. Youngpoong (0.18), DL (0.23), and KG Steel (0.24) also fell into the lower tier. Conversely, Posco Holdings (0.42) and LG Chem (0.62) had PBRs below 1 but exceeded the bottom 25% threshold for their sector.In consumer staples, E-Mart had a low PBR of 0.17, while Samyang Holdings was at 0.20, Samyang at 0.27, and Nongshim Holdings at 0.28. In finance, Hanwha Life (0.21), Hanwha General Insurance (0.29), and Hyundai Motor Securities (0.31) were among the lower performers. Industrial Bank of Korea and Daishin Securities both stood at 0.42, near the threshold.In the industrial sector, Lotte Holdings had a PBR of 0.28, HDC at 0.32, and CJ Logistics at 0.35. Samsung C&T traded at a discounted price of 0.73 compared to its net assets, but this was still above the lower tier threshold. In communication services, SBS had a PBR of 0.22, LG HelloVision at 0.28, and SkyLife at 0.37. Netmarble was at 0.50, close to the threshold.In the KOSDAQ market, the bottom 10% threshold is used. Calculated similarly, the thresholds were 0.26 for materials, 0.30 for industrial goods, 0.25 for consumer discretionary, and 0.32 for consumer staples. Finance was at 0.37, technology at 0.35, communication services at 0.31, and healthcare at 0.46.While the thresholds for the materials sector were similar across both markets, there was a significant difference in technology, with the KOSDAQ at 0.35 compared to 0.57 in the main market. The healthcare sector maintained a consistent threshold of 0.46 in both markets. Thus, the lower tier thresholds vary based on the composition of listed companies and PBR distribution in each market.However, these companies will not be publicly disclosed on November 2. Initially, the evaluation will consider the bottom tier status over the past six half-year periods, and the first announcement will exclude companies with a PBR exceeding the sector-specific thresholds as of October 22. Improvement plans will also be a factor. A stock exchange official stated, Among the companies that submitted plans, some do not meet the low PBR criteria, and we are currently finalizing the verification process for low PBR companies by calculating market capitalization and total capital.* This article has been translated by AI. October 25, 2026 17 -
Retail Investors Turn to Leveraged ETFs Amid Market Decline As the domestic stock market has fallen nearly 20%, retail investors are aggressively buying leveraged ETFs, betting on a potential rebound. There is a notable influx into single-stock leveraged ETFs for Samsung Electronics and SK Hynix, as well as a strong interest in the U.S. semiconductor triple-leveraged ETF, indicating a trend of bargain hunting following the markets decline. According to data from the Korea Exchange and Koscom CHECK, from October 1 to 23, individual investors net purchased a total of 315.4 billion won in 14 single-stock leveraged ETFs related to SK Hynix and Samsung Electronics. Specifically, 226.3 billion won flowed into seven SK Hynix-related ETFs, while seven Samsung Electronics-related ETFs saw an inflow of 89.1 billion won. Previously, in July, individual investors had net purchased 27.72 trillion won in 14 single-stock leveraged ETFs. However, following regulatory changes that increased the minimum deposit requirement starting July 31, they shifted to net selling. In August and September, they sold off 648.4 billion won and 497.9 billion won, respectively. By product, individual investors net purchased 152.9 billion won in the KODEX SK Hynix single-stock leveraged ETF this month, making it the 11th highest amount among domestic ETFs. Additionally, the KODEX Leveraged and KODEX Semiconductor Leveraged ETFs saw net purchases of 1.04 trillion won and 256.4 billion won, respectively, indicating a concentrated buying trend in leveraged products. With the KOSPI experiencing significant declines, some investors believe the drop is excessive and are purchasing leveraged products to maximize potential gains during a rebound. From October 1 to 23, the KOSPI fell by 18.83%, with some analysts suggesting that the recent drop has been overdone. Domestic investors have also ramped up their purchases of U.S. stocks. According to the Korea Securities Depositorys securities information portal, domestic investors net purchased approximately $4.96 billion (about 6.5 trillion won) in U.S. stocks from October 1 to 23. This figure is 4.8 times higher than the total net purchase amount from the previous month and represents the largest amount since January. With trading days still remaining, there is potential for this to surpass the record for the month. Domestic investors are actively buying leveraged ETFs in the U.S. as well. Among the top 10 net purchases during the same period, four were leveraged ETFs, including the Direxion Daily Semiconductor Bull 3X ETF (SOXL), which tracks the daily returns of an index composed of major U.S. semiconductor companies. The net purchase amount for SOXL was approximately $3.35 billion (about 4.44 trillion won), accounting for about 68% of the total net purchase amount for U.S. stocks. There is also a trend of domestic investors betting on a rebound in the Korean stock market through U.S.-listed ETFs. They net purchased $300 million worth of the Direxion Daily MSCI Korea Bull 3X ETF (KORU), making it the second highest net purchase among U.S. stocks. This indicates that investors are looking to capitalize on potential gains in the Korean market through both domestic and U.S.-listed leveraged products. Han Soo-jin, a senior researcher at Samsung Securities, noted, The recent trend of increasing net purchases of leveraged ETFs indicates that investors are anticipating a rebound in the index amid the sharp decline in the domestic stock market. * This article has been translated by AI. October 25, 2026 17
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South Korea's top 10 businesses lose 1,100 trillion won in market cap amid stock sell-off SEOUL, October 25 (AJP) - South Korea's 10 largest business groups have lost more than 1,100 trillion won (US$830 billion) in combined market capitalization this month as a sharp stock sell-off wiped out gains across major conglomerates, with chipmakers and shipbuilders among the hardest hit. According to financial information provider FnGuide, the combined market capitalization of the country's 10 largest business groups stood at about 3,371.44 trillion won as of Friday, down some 1,101 trillion won from 4,472.53 trillion won at the end of last month. The decline came as the benchmark Korea Composite Stock Price Index (KOSPI) plunged 18.8 percent this month. SK Group suffered the steepest loss, with its market capitalization falling 30.1 percent to 1,093 trillion won from 1,563 trillion won at the end of September. The decline was largely driven by sharp drops in SK hynix and SK Square, the group's two largest listed companies by market value, amid doubts over profits from artificial intelligence (AI)-related spending. Shares of SK hynix fell 28.1 percent this month, wiping out about 365 trillion won in market value while SK Square shares dropped 32 percent, shedding about 48 trillion won. HD Hyundai Group saw the second-largest decline, with its market capitalization falling 25.6 percent to 95 trillion won from about 128 trillion won during the same period, as five of its eight listed companies are shipbuilders whose shares have fallen amid concerns that the industry's long-running boom may be coming to an end. Samsung Group came next, with its market capitalization shrinking 24.3 percent to 1,636 trillion won from 2,161 trillion won. The decline was largely due to losses in semiconductor shares, as Samsung Electronics' market capitalization fell 19.6 percent to 1,260 trillion won from 1,570 trillion won. Meanwhile, LG Group saw the most modest decline among major conglomerates, with its market capitalization slipping 5.3 percent to 180 trillion won from 190 trillion won. The relative resilience was attributed in part to LG Energy Solution, whose shares have risen 7.3 percent this month on growing expectations for demand for energy storage systems (ESS), fueled by the expansion of AI data center infrastructure in the U.S. Amid lingering concerns over chipmakers' outlook even as demand for AI-related memory chips remains strong, Samsung Electronics and SK hynix are scheduled to release their third-quarter earnings later this week, with market watchers expecting robust results. But it remains to be seen whether their earnings will be strong enough to end the recent broad sell-off in the stock market. Industry watchers estimate that the two chipmakers' combined operating profit will reach around 185 trillion won. Samsung Electronics projected earlier this month that its third-quarter sales would reach 195 trillion won and operating profit 107.4 trillion won in its preliminary earnings report. October 25, 2026 16 -
Foreign Selling Pressure and Samsung Electronics' Earnings Week: Will KOSPI Recover Above 6000? Concerns over the profitability of investments in global artificial intelligence (AI) companies and SK Groups withdrawal of its Solidigm IPO have led to continued fluctuations in the KOSPI index. This week, Samsung Electronics will hold its third-quarter earnings conference call, and SK Hynix will announce its third-quarter results. Analysts expect ongoing volatility due to macroeconomic challenges and the semiconductor sectors earnings week.According to the securities industry on the 25th, the KOSPI faced significant volatility last week due to macroeconomic issues, including rising international oil prices following renewed Middle East conflicts, increased fiscal burdens leading to interest rate hikes, and global inflation concerns. The KOSPI closed at 5550.30 on the 23rd, down 117.75 points (2.08%) from the previous week. During the same period, the KOSDAQ fell by 43.09 points (5.42%). However, considering the previous weeks decline of 14.46%, the recent drop has shown signs of stabilization.On its first trading day on the 19th, the KOSPI opened up 1.76% but fell 3.73% on the 20th due to uncertainties surrounding AI investment sustainability. It rebounded with a 3.29% increase on the 21st, driven by strong performances from SpaceX and Supermicro. The index dropped again by 3.52% on the 22nd amid global uncertainties, but rose 0.30% on the 23rd after news that SK Group had halted its Solidigm IPO review, alleviating some semiconductor uncertainties.This week, the stock market is expected to experience mixed trends due to both positive and negative factors. Notably, foreign selling has decreased, which is a positive sign. From October 19 to 23, foreign net selling amounted to 1.1021 trillion won, a 92.3% drop from the previous weeks 13.2086 trillion won. However, the halt in buying from other corporations is a negative factor. Following Samsung Electronics, SK Hynixs share buyback ended on the 21st, resulting in a weekly net purchase of only 1.4024 trillion won from other corporations.The domestic stock market is expected to focus on key events such as Israels election on the 27th, the U.S. Federal Open Market Committee (FOMC) meeting, SK Hynixs earnings announcement on the 28th, and Samsung Electronics conference call on the 29th to gauge market direction.If neither the Likud party, which advocates for the overthrow of the Iranian regime, nor the Yashar party, which emphasizes exit strategies, secures a majority in the Israeli election, the likelihood of forming a coalition government increases, raising uncertainties. In the U.S., early voting is underway in key battleground states ahead of the November 3 midterm elections. Domestically, SK Hynix and Samsung Electronics will unveil their third-quarter results and new shareholder return policies on the 28th and 29th. Resolving uncertainties is expected to ease the supply-demand imbalance in the KOSPI and attract foreign buying.A securities industry official stated, This week, the possibility of the October FOMC holding interest rates steady and the Israeli election, which will determine the direction of the Iranian conflict, are expected to be key variables affecting international oil prices and global uncertainties. Given the ongoing uncertainties surrounding major corporate earnings announcements and macroeconomic challenges, the domestic market will continue to search for direction.* This article has been translated by AI. October 25, 2026 16
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KOSPI Falls Nearly 41% from Peak, Largest Drop Among Major Global Indices The KOSPI has fallen nearly 41% from its peak this year. A comparison of major global stock indices shows that the KOSPIs decline exceeds that of Hong Kongs Hang Seng Index by more than double and is over five times greater than Taiwans TAIEX.According to the Korea Exchange, the KOSPI closed at 5,550.30 on October 23. This represents a 40.86% drop from its intraday peak of 9,385.59 earlier this year.Data from various exchanges and financial information providers indicate that among the ten indices compared—including the KOSPI, Hong Kongs Hang Seng, Indias Nifty 50, Japans Nikkei 225, Chinas Shanghai Composite, Frances CAC 40, Taiwans TAIEX, the U.S. Nasdaq Composite, Germanys DAX, and Australias S&P/ASX 200—the KOSPI experienced the largest decline.The decline rates were calculated by comparing each indexs highest intraday price of the year with its closing price on October 23. Taiwans index was closed on the 23rd, so the closing price from the previous trading day, October 22, was used.The second-largest decline was seen in Hong Kongs Hang Seng Index, which fell 17.69% from its peak of 28,056.10 on January 29 to 23,093.37 on October 23. The KOSPIs drop is approximately 2.3 times that of the Hang Seng Index.Indias Nifty 50 index decreased by 14.31%, dropping from its peak of 26,373.20 to 22,600.00.Japans Nikkei 225 index fell 13.92%, from its peak of 32,831.73 on June 22 to 26,693.16. Chinas Shanghai Composite index dropped 13.35%, from 4,258.86 to 3,690.48.Frances CAC 40 index decreased by 11.10%, falling from its peak of 8,755.03 to 7,782.82.Notably, Taiwans TAIEX index reached an intraday high of 49,968.92 on October 6 but closed at 46,041.43 on October 22, reflecting a decline of only 7.86% from its peak.Both South Korea and Taiwan have significant semiconductor industries that heavily influence their stock markets. However, the extent of the decline from their peaks has varied, with the KOSPIs drop being approximately 5.2 times greater than that of Taiwans TAIEX.Meanwhile, the declines in the U.S., Germany, and Australia were in single digits. The U.S. Nasdaq Composite fell 6.38%, dropping from its peak of 27,722.75 on October 6 to 25,955.34 on October 23.Germanys DAX index decreased by 5.40%, falling from its peak of 26,618.74 to 25,181.65. Australias S&P/ASX 200 index dropped 5.39%, from 9,296.70 to 8,795.20.The KOSPIs decline from its peak is about 6.4 times that of the Nasdaq Composite and approximately 7.6 times that of the DAX and S&P/ASX 200.Despite the KOSPIs drop of over 40% from its peak this year, it remains higher compared to the end of last year. The returns can vary significantly depending on the timing of investments in the same index.* This article has been translated by AI. October 25, 2026 15
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Increase in Home Loans Sparks Rise in Borrowing for Investment Recent increases in mortgage loans, driven by rising home prices in the metropolitan area, have been accompanied by a resurgence in demand for credit loans, which have grown by over 1 trillion won in just one month. Analysts suggest that investors are seizing the opportunity to buy low amid a declining stock market. However, concerns are mounting that the burden of repayment may increase for borrowers due to the potential for further interest rate hikes, especially as the KOSPI index struggles to rebound. According to financial sources, as of October 22, the total household loan balance from the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) reached 783.44 trillion won, an increase of 2.6058 trillion won from the end of last month. After a decline of 1.2852 trillion won in September, this marks a return to growth for household loans after a month. Notably, the balance of credit loans rose to 109.35 trillion won, increasing by 1.121 trillion won compared to the previous month, surpassing the growth in mortgage loans. This marks the first increase in three months and accounts for approximately 43% of the total increase in household loans. Investors appear to be utilizing loans to capitalize on the recent stock market downturn, which saw the KOSPI drop by 2.08% last week and the KOSDAQ fall by 5.42%. The balance of mortgage loans also increased to 622.40 trillion won, up by 999.5 billion won from the end of last month. This is a significant rise compared to the mere 125.2 billion won increase in September, indicating a renewed demand for loans likely spurred by rising home prices. According to KB Real Estate, the average sale price of apartments in Seoul rose by 0.61% compared to the previous month. However, the increase in loans coincides with rising interest rate pressures. Although the Bank of Korea held the base rate steady at 3% on October 22, Governor Lee Hwan-seong mentioned the possibility of a quicker-than-expected economic recovery and rising prices, leading to speculation about a potential rate hike in November. The impact of rising interest rates may be felt more acutely by vulnerable borrowers. A report on financial stability released by the Bank of Korea last month indicated that the response of delinquency rates to interest rate hikes is most pronounced among vulnerable borrowers about nine months after a rate increase, compared to about 15 months for households and businesses. This suggests that the effects of the rate hikes in July and August could increase delinquency pressures on vulnerable borrowers in the first half of next year. The delinquency rate for household loans in the banking sector has already begun to rise. As of the end of August, the delinquency rate for household loans was 0.45%, up 0.03 percentage points from the previous month. The delinquency rate for mortgage loans also increased to 0.31%, rising by 0.02 percentage points. Kim Sang-bong, a professor of economics at Hansung University, stated, Even if interest rates rise, it is difficult for homeowners to sell their properties immediately, which means the burden of interest payments may persist for a long time. As interest burdens grow, borrowers may find themselves in a position where they need to cut back on spending and reduce consumption. October 25, 2026 15
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Top 10 Korean Conglomerates Lose Over $1 Trillion in Market Value Amid KOSPI Decline As a result of the sharp decline in the KOSPI index, the market capitalization of South Koreas top 10 conglomerates has evaporated by over 1,100 trillion won this month. Concerns over profitability in the artificial intelligence (AI) value chain and weakness in shipbuilding and defense stocks have particularly impacted SK Group, HD Hyundai, and Samsung Group. According to the Korea Exchange and financial information provider FnGuide, as of October 23, the combined market capitalization of the top 10 conglomerates was approximately 3,371.44 trillion won. This marks a decrease of about 1,101 trillion won compared to the end of last month, when it stood at around 4,472.53 trillion won. The KOSPI has dropped 18.8% this month, leading to a decline in market capitalization across all top 10 groups. SK Group experienced the largest decrease, with its market capitalization plummeting by 30.1% from 1,563 trillion won at the end of last month to 1,093 trillion won recently. The significant drop in SK Groups market value is attributed to the sharp decline in the stock prices of its major subsidiaries, SK Hynix and SK Square, due to concerns over AI value chain profitability. This month, SK Hynixs stock price fell by 28.1%, while SK Squares dropped by 32.0%, resulting in a combined market capitalization loss of 365 trillion won and 48 trillion won, respectively. HD Hyundai Groups market capitalization decreased by 25.6%, from approximately 128 trillion won at the end of last month to 95 trillion won as of October 23. With five of its eight listed companies classified as shipbuilding stocks, the recent concerns over a peak-out in the shipbuilding industry have negatively affected their stock prices. HD Hyundais market capitalization fell from about 16 trillion won to 11 trillion won, a 32% decrease, while HD Hyundai Heavy Industries saw a 30% drop from approximately 46 trillion won to 32 trillion won. Samsung Groups market capitalization decreased by 24.3%, from 2,161 trillion won to 1,636 trillion won, marking the third-largest decline. This drop was significantly influenced by the poor performance of semiconductor stocks, with Samsung Electronics market capitalization falling from 1,570 trillion won to 1,260 trillion won, a 19.6% decrease. Hanwha Group, which has a high proportion of export-oriented companies in shipbuilding and defense, also saw its market capitalization decline by 19.3%, from approximately 120 trillion won to 97 trillion won, making it the fourth-largest decrease. The recent strengthening of the won has raised concerns about the revenue and profitability of export companies, putting pressure on their stock prices. Hanwha Engines market capitalization dropped from about 4.1 trillion won to 2.7 trillion won, a 34.2% decrease, while Hanwha Ocean fell from approximately 24 trillion won to 17 trillion won, a 30% decline. The groups leading stock, Hanwha Aerospace, also saw its market capitalization decrease from about 52 trillion won to 41 trillion won, a 21.4% drop. In contrast, LG Groups market capitalization only decreased by 5.3%, from 190 trillion won to 180 trillion won. This resilience is attributed to a 7.3% increase in the stock price of its leading subsidiary, LG Energy Solution, driven by rising demand for AI data centers in the U.S., highlighting growth potential in the energy storage system (ESS) market. POSCO Groups market capitalization fell by 6.4%, from approximately 540 trillion won to 505 trillion won, reflecting a relatively lower decline. Additionally, GS Groups market capitalization decreased by 13%, from about 19 trillion won to 16 trillion won, while Shinsegae Group saw a 12% drop from approximately 6 trillion won to 5.3 trillion won. Hyundai Motor Groups market capitalization fell by 15%, from about 215 trillion won to 182 trillion won, and Lotte Groups market capitalization decreased by 4.3%, from approximately 17 trillion won to 16 trillion won. October 25, 2026 13
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KPI Corporation Fined 31 Million Won for Violating Fair Trade Law KPI Corporation, a general holding company, has been found to have violated the Fair Trade Act by holding shares in a financial company for approximately 18 months. Although the company is no longer classified as a holding company, regulatory authorities have decided to impose corrective measures and a fine for past violations.On October 25, the Fair Trade Commission announced that it would impose a corrective order and a fine of 31 million won on KPI Corporation for violating the restrictions on holding company activities under the Fair Trade Act.According to Article 18, Paragraph 2, Item 5 of the Fair Trade Act, general holding companies are prohibited from owning shares in domestic companies engaged in financial and insurance businesses. This regulation aims to prevent the concentration of economic power resulting from industrial capital owning financial capital and to ensure transparency in the holding company system.However, KPI Corporation owned 333,333 shares of SparkLabs Partners, a financial company, from July 5, 2023, to December 31, 2024, while it was classified as a general holding company. This represented a 6.67% stake, held for about 18 months. SparkLabs Partners is categorized under other financial investment businesses in the Korean Standard Industrial Classification, making it a financial company subject to restrictions on stock ownership by holding companies.Founded in 2005, KPI Corporation engages in the import and export of chemical substances and products. It transitioned to a general holding company in December 2013 but is currently not classified as one under the Fair Trade Act. This is because it converted to a holding company before the asset requirement was raised from 100 billion won to 500 billion won in 2017.As of the end of 2024, KPI Corporations total assets were approximately 454.5 billion won, and it could have been granted a grace period until June 2027. However, by the end of 2024, the proportion of subsidiary stock value to total assets fell below 50%, leading to its exclusion from holding company status.The Fair Trade Commission imposed sanctions for the legal violations that occurred during the period when KPI Corporation was classified as a holding company, regardless of its current status. While this does not imply that it currently holds shares in financial companies, the commission issued a prohibition order to prevent similar actions if the company transitions back to holding company status in the future.The Fair Trade Commission stated, It is significant that we held the company accountable for violations that occurred while it was classified as a holding company, even though it has since exited that status. There is a need to maintain transparency in ownership structures through regulations that restrict general holding companies from owning shares in financial and insurance companies.* This article has been translated by AI. October 25, 2026 12
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Retail Investors Bet 315.4 Billion Won on Leveraged ETFs Following Regulatory Changes Retail investors have begun purchasing leveraged exchange-traded funds (ETFs) focused on Samsung Electronics and SK Hynix this month, reversing a trend of net selling that lasted for two months following regulatory tightening at the end of July. This shift is interpreted as a response to expectations of a market rebound amid significant stock market declines.According to the Korea Exchange and Koscom CHECK, from October 1 to 23, individual investors net bought a total of 315.4 billion won in 14 leveraged ETFs focused on SK Hynix and Samsung Electronics. The net purchase amount was 226.3 billion won for seven SK Hynix ETFs and 89.1 billion won for seven Samsung Electronics ETFs.Previously, individual investors had net purchased 2.77 trillion won in 14 leveraged ETFs in July, but after regulatory changes increased the minimum deposit requirement for these ETFs starting July 31, they shifted to net selling. In August and September, they net sold 648.4 billion won and 497.9 billion won, respectively.Among individual products, investors net bought 152.9 billion won in the KODEX SK Hynix leveraged ETF this month, marking it as the 11th highest amount among domestically listed ETFs. In addition to single-stock leveraged ETFs, the KODEX leveraged ETF and KODEX semiconductor leveraged ETF also saw net purchases of 1.04 trillion won and 256.4 billion won, respectively, indicating a strong interest in leveraged products.The recent sharp decline in the KOSPI has likely fueled sentiment for a potential rebound. From October 1 to 23, the KOSPI fell by 18.83%.In contrast, foreign investors have diversified their portfolios by purchasing both leveraged and inverse ETFs. This month, foreign investors net bought 148.3 billion won in the KODEX leveraged ETF, making it the second highest net purchase among ETFs, following the KODEX 200. They also net bought 51.3 billion won in the KODEX 200 Futures Inverse 2X, which tracks the KOSPI 200s daily returns at -2 times, ranking fifth in total net purchases among all ETFs.For single-stock leveraged ETFs, foreign investors shifted from net selling in July and August to net buying in September, but they returned to net selling this month with 48.8 billion won. They net sold 50.8 billion won in seven SK Hynix-related ETFs while net buying 2 billion won in seven Samsung Electronics-related ETFs.Han Soo-jin, a senior researcher at Samsung Securities, noted, The recent trend of net buying and increasing net issuance of leveraged ETFs indicates a growing expectation for a market rebound amid the sharp decline in the domestic stock market.* This article has been translated by AI. October 25, 2026 10
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AI Debt Continues to Rise as Big Tech Bonds Approach $300 Billion Global AI big tech companies are experiencing significant revenue growth due to rising demand for AI, but their debt levels are also surging, primarily due to excessive infrastructure investments. Funding for AI investments is increasingly shifting from operating cash to bonds, new equity, and guarantees.According to the IT industry on October 22, Metas long-term debt rose from $59 billion at the end of March to $80.9 billion by the end of September, an increase of over $22 billion in just six months.In its third-quarter earnings report, Meta announced a revenue increase of 26% to $64.6 billion, but capital expenditures reached $34.91 billion, accounting for 54% of its revenue. This suggests that the company spent about $2.1 billion more than it generated in cash flow.To cover the shortfall, Meta has turned to external funding. Since November of last year, the company has raised $55 billion through bonds, including $30 billion in October and $25 billion in April. Notably, it did not repurchase any shares in the first quarter. As of June 30, Metas net cash, excluding bonds, was approximately $6 billion, down from about $22.6 billion at the end of the previous year.In its joint venture with Blue Owl to build the Hyperion data center, Meta is also carrying off-balance-sheet special purpose vehicle (SPV) debt amounting to approximately $27.3 billion. Additionally, the board approved the creation of non-voting Class C common stock, effective January 2027.The financial situations of five major tech companies—Alphabet, Amazon, Meta, Microsoft, and Oracle—are similarly concerning. These companies issued approximately $220 billion in bonds by August this year, nearly 1.8 times the $121 billion issued in the previous year, which is roughly equivalent to 300 trillion won.As of June 30, Amazons long-term debt stood at $128.9 billion, while Alphabets total debt exceeded $100 billion, including bonds with maturities of up to 100 years. S&P Global Ratings estimates that the capital expenditures of these five companies will reach about $750 billion this year, representing 38% of their combined revenue.According to Barclays, AI-related bonds account for about 15% of U.S. investment-grade corporate bond issuance, and JPMorgan forecasts that global technology, media, and telecommunications (TMT) bond issuance will reach a record $540 billion this year.Oracle faces a heavier burden, with long-term debt reaching $149 billion at the end of the recent fiscal year, an increase of $53 billion in one year. However, its cash reserves are only $31.3 billion, about one-fifth of its debt. The companys credit rating has been downgraded to BBB. OpenAI has also reportedly reduced its capital expenditures by nearly half due to investment burdens and is seeking an additional $30 billion in funding.Anthropics revenue surged to $16.3 billion in the first half of this year, up from $1.1 billion a year earlier, but its infrastructure spending increased nearly fourfold from $2.3 billion to about $9 billion. The companys net loss for the first half also rose to $80.7 billion, six times higher than the $13 billion reported in the same period last year, with $72 billion attributed to non-cash expenses related to convertible bond valuations.The debt cycle extends to chip suppliers and model companies as well. According to Forbes, citing Nvidias quarterly report, the companys commitments for data center leases and capacity guarantees amount to as much as $164.5 billion, with direct investments or commitments to AI cloud companies exceeding $7 billion.* This article has been translated by AI. October 25, 2026 10
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Weekly Stock Market Outlook: Focus on Semiconductor Earnings and Shareholder Returns Next week, the domestic stock market is expected to seek direction based on the earnings reports from Samsung Electronics and SK Hynix, as well as any announcements regarding additional shareholder returns. Recently, the KOSPI has experienced a sharp decline due to concerns over the profitability of AI investments and foreign selling pressure. However, analysts believe that if improvements in earnings and shareholder returns are confirmed, the supply-demand imbalance could be alleviated.According to the financial investment industry on October 23, NH Investment & Securities projected the KOSPI to range between 5,100 and 6,400 points next week. Factors contributing to potential gains include third-quarter earnings and shareholder return plans from major companies, while geopolitical risks are cited as potential downward pressures.The most anticipated events are the earnings announcements from SK Hynix on October 28 and Samsung Electronics on October 29. There is particular interest in whether additional share buybacks and shareholder return plans will be disclosed alongside the earnings reports. Given the recent decline in the KOSPI, there has been a lack of buyers to absorb the foreign selling, making shareholder returns from major semiconductor firms a potential catalyst for improving supply-demand dynamics.Na Jeong-hwan, a researcher at NH Investment & Securities, noted that the recent decline in the stock market is attributed to a lack of buyers to absorb foreign selling rather than a deterioration of fundamentals. He estimated that SK Hynixs additional shareholder return resources exceed 30 trillion won, stating, If a large-scale share buyback is confirmed, buying interest from other corporations could absorb some of the foreign selling, thereby alleviating the supply-demand imbalance in the KOSPI.The recovery of investor sentiment regarding AI investments is also a key variable. Earnings from SpaceX and Supermicro have confirmed the growing demand for AI computing and robust data center investments. Conversely, Metas transition to negative free cash flow and Teslas adjustments to its investment plans have raised concerns about whether profitability can keep pace with the scale of AI investments. Analysts suggest that confidence in the sustainability and profitability of AI investments must be established through upcoming earnings from major tech firms to ease market anxieties.Lee Kyung-min, a researcher at Daishin Securities, believes that despite the recent market adjustments, there is potential for normalization in KOSPI valuations. He analyzed that the recent sharp decline is a result of macroeconomic pressures and overlapping concerns about AI credit and profitability rather than a deterioration of fundamentals. He emphasized that next week’s major tech earnings will be crucial in reinforcing confidence in the sustainability and profitability of AI investments.U.S. monetary policy and international oil prices are also expected to influence market direction. The Federal Open Market Committee (FOMC) meeting is scheduled for October 29, with the market closely watching not only the decision on interest rates but also the future trajectory of monetary policy. Continued inflationary pressures due to high oil prices could hinder a market rebound if the Federal Reserve strengthens its tightening stance. Additionally, ongoing geopolitical instability in the Middle East could keep international oil prices elevated, potentially weighing on investor sentiment.Ultimately, next week’s stock market will be influenced by both individual corporate factors, such as semiconductor earnings and shareholder returns, and macroeconomic variables like interest rates and oil prices. If improvements in earnings are confirmed and additional shareholder returns can absorb foreign selling, the supply-demand imbalance may ease. However, ongoing doubts about AI investment profitability and geopolitical uncertainties could continue to drive volatility.* This article has been translated by AI. October 24, 2026 08
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First Shipment of Russian Diesel Heads to the U.S. After Sanctions Eased A tanker carrying Russian diesel has set sail for the United States, marking the first shipment since the easing of U.S. energy sanctions against Russia. According to Yonhap News on the 23rd, Reuters reported that Russian diesel is en route to the U.S. Data from the London Stock Exchange Group (LSEG), obtained by Reuters, indicates that a Maltese-flagged tanker loaded 40,000 tons of Russian diesel at the port of Primorsk, Russia, the day before. The tanker is expected to arrive in New York on November 7. Previously, U.S. President Donald Trump announced on the 9th a temporary exemption from sanctions on Russian oil exports, allowing the import of Russian diesel into the U.S. During this announcement, Trump stated that he and Russian President Vladimir Putin had agreed that Russia would immediately export 300,000 tons of diesel and over 500,000 tons the following month. This move is seen as a response by the Trump administration to alleviate inflationary pressures from rising fuel prices ahead of the U.S. midterm elections on November 3.* This article has been translated by AI. October 23, 2026 19
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Waiting becomes second nature for young 'pali pali' Koreans SEOUL, October 23 (AJP) - South Koreans are famously impatient, with a national ethos summed up by "pali pali," or "hurry, hurry." Yet younger generations seem curiously unhurried when it comes to queuing for hours for a meal or something they love. The queue for Justin Bieber's SKYLRK pop-up in Seoul began forming a day in advance. So did the line for Friday's pickup of Apple's new foldable phone. Seasoned queuers brought camping chairs and passed the time playing games or reading. Some befriended strangers or caught up with friends who shared their interests. Food and tips on staying warm circulated among those waiting. Kim Sung-min, a 34-year-old office worker, had arrived at 6 a.m. Eight hours later, he was still outside among more than a hundred people waiting to buy a hoodie. He just hoped there would be one left in his size. "I really like Justin Bieber, and I really want something from the brand he created," Kim said. "It's about being a fan." As he shared his excitement, someone behind him gave up and left. "There are just too many people ahead," the departing shopper said, adding that buying through resale or other platforms might be smarter. To onlookers, waiting since the small hours just to make a purchase may hardly look smart. South Koreans call the early rush to secure a purchase an "open run." The phrase suggests speed. Much of the experience involves staying put. Outside fashion pop-ups, dessert shops and newly opened restaurants, shoppers spend hours pursuing things others cannot imagine waiting for. Part of the reward is what they hope to take home. Part is simply being there: sharing an interest, trying something new or enjoying the anticipation of a long-wanted purchase. Kim said people often ask why he bothers and consider it a waste of time. But collecting and wearing things associated with someone he likes makes him happy — a feeling he finds difficult to explain to someone who has never joined the queue. "When you finally get exactly what you wanted after waiting so long — that feeling is incredible," he said. Bang Hae-jin, a professor at Kookmin University who teaches consumer marketing and psychology, said the effort of obtaining a product can become part of its appeal. Shoppers may attach greater value to something they have spent time pursuing. Those around them offer companionship and reinforce the feeling that the item is worth having. "Waiting becomes part of the experience rather than simply a cost," Bang said. For fans, attachment to an artist can give merchandise meaning before they have examined its fabric or fit. Wearing it expresses that attachment. Waiting alongside other fans offers a place to share it. For Lim Hyo-seon, the attraction is food — and the wait is easier with a chair. Born in 1999, Lim carries a small chair when she expects to queue. Standing gets tiring, and she would rather have somewhere to sit than settle onto the pavement. She has waited for Han Jeong Seon, Knotted and Chipotle. When acquaintances ask whether she gets bored, she wonders why the time needs defending. "Isn't it natural to spend time on something you like?" she said. If a food item is attracting attention, Lim wants to try it. Other people's enthusiasm may bring it to her notice, but tasting it is how she decides for herself. "You have to try it to know whether you like it," she said. The queue can also help her plan the next outing. People exchange restaurant recommendations, strike up conversations and hold places for one another during bathroom breaks. Lim sees a chance to make friends with people who have chosen to spend their time much as she has. Not every wait demands the same endurance. At Han Jeong Seon, she recalled registering for a place and walking around nearby until a notification arrived. Knotted had been tougher, partly because she felt supplies were limited. A place in line offers no guarantee of what will be left at the counter. Being free to walk around makes the delay easier; worrying about stock makes it harder. Still, the appeal of buying in person extends beyond securing products unavailable elsewhere. In an Embrain Trendmonitor survey conducted in late 2024, 64.1 percent of respondents who had visited pop-ups said buying on-site was enjoyable even when the products were also available online. Among all 1,000 respondents — South Koreans aged 19 to 59 — 43.3 percent said they would be willing to wait for a pop-up involving a brand or field that interested them. The findings measure willingness rather than hours actually spent queuing, but suggest why a long line does not automatically put shoppers off. For an unfamiliar restaurant, the queue itself may supply a reason to visit. Bang said consumers who know little about a product can treat other people's willingness to wait as a clue to its quality. Someone who already knows the product has less to learn from the crowd and may simply see a delay. Who else is waiting matters, too. Lim will queue for food but avoids merchandise lines because she dislikes competing with resellers who buy goods to offer them at higher prices. Someone visiting on a weekend or taking leave from work, she said, cannot necessarily compete with people doing it for a living. Online, sellers put a price on the alternative to waiting. One listing offered a blue SKYLRK hoodie for 550,000 won. The seller said it had been purchased during the opening-day rush and invited offers. That was an asking price, with no indication of a completed sale. For those still in line, walking away can become harder as the hours accumulate. Bang said shoppers may feel compelled to buy something to justify the time already spent. The effort can also influence how generously they judge what they eventually obtain. "That means the evaluation becomes more favorable, not that the actual quality has improved," Bang said. For a generation raised on "hurry, hurry," patience has found its place — at least when there is something worth waiting for. October 23, 2026 17 -
AJP Factbox: What PERs say of Korean stock value South Korean equities traded at a 12-month forward price-to-earnings ratio (PER) of 4.95 times as of Sept. 30, roughly a quarter of the U.S. multiple of 19.38 times, according to global index provider MSCI. MSCI. Samsung Electronics and SK hynix traded at just 3.54 times and 3.18 times forward earnings, respectively, compared with 17.06 times for Taiwan's TSMC and 5.18 times for U.S. chipmaker Micron Technology. October 23, 2026 17 -
Korean stocks look cheap, but are they a good buy? SEOUL, October 23 (AJP) — South Korean stocks have moved back to the bargain corner after dominating the top shelf in the first half, but investors remain unconvinced they offer good value. The October crash has prompted the president to complain that Korean equities are too undervalued Korean equities. Investors, however, remain wary of how much the country’s chip earnings will be worth if global AI spending subsides. South Korea’s 12-month forward price-to-earnings ratio (PER) stood at 4.95 times as of Sept. 30, according to global index provider MSCI. Comparable ratios were 19.38 times for the United States, 18.65 times for Taiwan, 15.63 times for Japan and 10.15 times for China. The measure compares stock prices with expected earnings over the next 12 months. Seoul's figure does not capture the October rout. The KOSPI has lost 19 percent this month through Friday, while the junior KOSDAQ has fallen 12 percent. The KOSPI is nearly 40 percent below its June 22 peak. The KOSPI’s forward PER has fallen to 4.41 times from 5.43 earlier this month, according to financial data provider FnGuide — below the roughly 7 to 8 times recorded during the 2008 global financial crisis and the COVID-19 market turmoil in 2020. Yet analysts caution against treating low earnings multiples as an automatic buying signal. “By that logic, even if the KOSPI reached 11,000, it could still be considered undervalued,” said an analyst at Yuanta Securities. The unusually low ratio reflects both falling share prices and soaring earnings expectations for the country’s dominant chipmakers. Hanwha Investment & Securities raised its 2027 operating profit forecast for Samsung Electronics by 8 percent to 606 trillion won ($458.3 billion) on Oct. 6, citing higher prices and shipments of next-generation high-bandwidth memory, or HBM4. Such upgrades lower forward PERs even when share prices do not fall. When prices also retreat, the apparent discount becomes more striking. Samsung Electronics and SK hynix traded at 3.54 times and 3.18 times forward earnings, respectively, as of Thursday, according to financial data platform Stock Analysis. Taiwan Semiconductor Manufacturing Co. (TSMC) traded at 17.06 times, while U.S. memory-chip maker Micron Technology traded at 5.18 times. The gap extends beyond chips, though it is less pronounced. Hyundai Motor traded at 8.64 times forward earnings, compared with 11.03 times for Japan’s Toyota Motor. But the Yuanta analyst cautioned that different markets command different multiples. “The S&P 500 generally trades at a higher earnings multiple than the KOSPI, so you cannot simply compare SK hynix with Micron.” Even securities representing ownership in the same company can trade at different valuations. SK hynix’s American depositary receipts traded at a premium of about 43 percent to its Seoul-listed shares as of Thursday. “The valuation standards are different for companies listed in Korea and those listed in the United States,” the analyst said. “You cannot simply compare the absolute numbers.” The headline KOSPI multiple also conceals a less dramatic picture across the rest of the market. Excluding chipmakers, the index’s forward PER stands at 10.3 times, down from this year’s peak of 14.5 but close to its 20-year average of 10.4, according to Kiwoom Securities. Much of the apparent bargain therefore rests on the earnings forecasts of a handful of semiconductor companies. “The question is no longer whether the chipmakers will deliver strong earnings, but whether those profits can be sustained,” the Yuanta analyst said. Another measure offers a potentially stronger argument for undervaluation. Samsung Electronics and SK hynix both had 24-month forward price-to-book ratios (PBRs) below one, according to Yuanta. That means their current market values were below their projected net assets two years ahead. But those projections, too, depend on the profits the companies are expected to accumulate. The valuation debate ultimately returns to the durability of AI demand. Large technology companies and specialized AI infrastructure providers have poured money into data centers, servers and computing capacity. As some rely increasingly on debt, investors are questioning whether the eventual returns will justify the spending. “Companies can borrow money to invest, but eventually they have to generate enough profit to recover that investment,” the analyst said. “The question is whether that can be sustained.” Those concerns are weighing on CoreWeave, which rents out computing power for AI applications and has accumulated about $50 billion in debt. Yields on some of its bonds climbed to around 15 to 16 percent in mid-October as investors grew wary of its borrowing. The pressure extends to larger technology companies. Meta Platforms on Wednesday raised the lower end of its 2026 capital spending forecast to $135 billion from $130 billion, leaving the upper end at $145 billion. It reported negative free cash flow of $2.12 billion in the third quarter despite a 26 percent rise in revenue. For Korean chipmakers, the risk is that financing pressures eventually slow the infrastructure spending driving demand for their products. Strong current earnings are already proving insufficient to reassure investors elsewhere in the semiconductor industry. U.S. equipment maker Lam Research reported quarterly revenue and earnings above market expectations on Wednesday, yet its shares fell about 6 percent in after-hours trading as investors weighed supply-chain constraints and a weaker outlook for sales to China. Samsung Electronics and SK hynix face a similar test: record profits may do little for their valuations if investors see them as a cyclical peak. Foreign investors sold a net 11.24 trillion won ($8.4 billion) of KOSPI shares during the week of Oct. 12–16, including 8.85 trillion won in the two chipmakers, according to Koscom CHECK data. Selling continued on Friday despite a modest market rebound. Foreign investors sold a net 982.6 billion won, while institutions bought 937.7 billion won and retail investors purchased 44.9 billion won. Korea’s longstanding corporate governance concerns provide another reason to demand a discount. “In the United States, shareholders are treated as the owners of the company, and companies return value to them,” the Yuanta analyst said. In Korea, he said, decisions favoring controlling shareholders, corporate restructuring and subsidiary listings can leave investors uncertain whether rising profits will benefit them. Those concerns surfaced in the debate over a proposed U.S. listing of Solidigm, SK hynix’s NAND flash memory subsidiary. The plan drew scrutiny over the potential dilution of shareholder value through a separate listing. SK hynix said Friday it had stopped reviewing the listing, citing market conditions and share price movements. Despite the selloff, some brokerages see substantial room for recovery. Hanwha has set a 2027 KOSPI target of 8,500 within a projected range of 6,000 to 9,300. Its target implies upside of about 53 percent from Friday’s close of 5,550.30. The forecast rests on the gap between corporate profitability and share prices. The KOSPI’s projected return on equity (ROE), which measures profits relative to shareholders’ capital, stands at 25.5 percent for the next 12 months, near a record high. Yet its forward PBR was just 1.08 times as of Oct. 16. Based on historical relationships, Hanwha estimates that such profitability could justify a PBR of around two times. Current prices instead imply an ROE of about 11 percent, below the 16 percent recorded over the past year. The brokerage found that since 2005, similar periods when market-implied ROE fell below actual ROE were followed by an average KOSPI gain of 28 percent over the next year. Returns were positive in 84 percent of cases. Its 8,500 target assumes a more modest valuation recovery, with forward PBR rising to 1.32 times. Hanwha expects an initial rebound toward 7,600 by year-end, followed by more gradual gains in 2027. The Yuanta analyst said the index could eventually surpass even Hanwha’s upper projection of 9,300. But it could fall further first, making a market bottom difficult to call. The next clues will come from SK hynix’s earnings announcement on Oct. 28 and Samsung Electronics’ earnings call on Oct. 29. Investors will scrutinize their outlooks for 2027 and 2028 and any new shareholder return plans. The U.S. midterm elections on Nov. 3 could also influence expectations for fiscal policy and long-term interest rates. At home, the scope for policy to deliver a lasting valuation recovery remains contested. “Perhaps doing nothing would be more helpful,” the Yuanta analyst said, questioning the effectiveness of measures introduced this year. Governance and shareholder rights problems would take time to resolve, he added. Monetary policy offers little immediate relief. The Bank of Korea held its benchmark rate at 3.00 percent on Thursday and left the door open to further increases as inflation remains elevated. Korean stocks may look cheap against the profits analysts expect. To become a convincing bargain, investors need confidence that those profits will endure — and that shareholders will receive their share. October 23, 2026 17