KOSPI Continues to Experience Volatility Despite 'Danjongle' Regulations

◆Aju Economy Major News
▷'+17.91→-5.12→+3.76→-4.8%'... KOSPI Continues to Experience Volatility Despite 'Danjongle' Regulations
- According to the financial investment industry and the Capital Market Research Institute, the KOSPI's daily return volatility for the first half of this year reached 3.6%, nearly double last year's annual average of 1.4%. This is among the highest levels among 36 countries analyzed by the Capital Market Research Institute.
- In response to the extreme volatility, the government expedited the implementation of 'Danjongle' regulations on July 30. However, the measures have yet to show any effect. Since July 30, the index has experienced fluctuations of over 4% on four occasions within six trading days.
- The report indicates that the market capitalization share of Samsung Electronics and SK Hynix, which was around 23% at the beginning of last year, surged to 55% by the end of June (59% based on KOSPI 200).
- With more than half of the index dominated by these two companies, any external shocks, such as uncertainties in the global memory semiconductor industry or U.S.-China tech conflicts, lead to significant impacts on the KOSPI, creating a vicious cycle of decline.
- Other experts have echoed similar sentiments. Lee Byung-geon, head of research at DB Securities, stated, "The sharp fluctuations in the index are not due to leveraged products, but rather because external factors, such as profit-taking by U.S. big tech companies, have weakened the buying momentum from individual investors, resulting in thin liquidity."

◆Major Reports
▷Copper Prices Reflecting Shortage Concerns, Expecting Additional Liquidity [Daishin Securities]
- Copper prices have once again surpassed $14,000 per ton. This surge follows heavy rains and snow in northern Chile last week, which damaged transmission facilities and temporarily halted mining operations.
- However, the key issue is that prices are sensitive to weather-related disruptions. The world's top 20 mining companies have lowered their production guidance for this year, continuing a trend from last year, primarily due to aging mines and quality issues.
- Conversely, demand is expanding rapidly. As the AI industry begins to take off, electricity demand is surging, leading to rapid development of essential power infrastructure. Investments in high-voltage transmission facilities, which require 5 to 7 times more copper than standard power grids, are increasing to minimize transmission losses.
- If liquidity is also factored in, a breakthrough of $16,000 per ton within the year is entirely possible. In theory, as liquidity emerges, commodities rise in the order of 'precious metals → non-ferrous metals → energy → agricultural products.' Based on gold, which serves as a hedge, the non-ferrous metals sector could see further gains in the first half of next year, with copper potentially rising through the first quarter of next year.

◆Major Disclosures After Market Close (August 6)
▷Korea Investment & Securities reports Q2 operating profit of 1.21 trillion won, up 92.4% year-on-year.
▷L&F posts Q2 operating profit of 20.8 billion won, returning to profitability.
▷Wonik IPS reports Q2 operating profit of 18.4 billion won, down 49.6% year-on-year.
▷KT&G reports Q2 operating profit of 414.5 billion won, up 18.5% year-on-year.
▷CJ ENM reports Q2 operating profit of 33.4 billion won, up 16.9% year-on-year.
▷LG Uplus reports Q2 operating profit of 344.5 billion won, a 13.1% increase.

◆Fund Trends (as of August 5, excluding ETFs)
▷Domestic Equity: 24.334 trillion won
▷Foreign Equity: 199.3 billion won

◆Today's Schedule (Friday)
▷China: Import and Export Statistics (July)
▷Germany: Industrial Production (June)
▷United States: Employment Report (July)

* This article has been translated by AI.