KOSPI Breaks 7,400 for the First Time as Samsung Electronics and SK Hynix Surge Together

KOSPI Breaks 7,400 for the First Time

The KOSPI crossed the 7,000 mark for the first time in history and continued climbing to break through 7,400 intraday, up roughly 6% on the day. Samsung Electronics and SK Hynix jumped about 13% and 10% respectively, driving the index higher, while foreigners were net buyers of more than 1.5 trillion won worth of KOSPI shares. The KOSDAQ moved in the opposite direction, falling around 0.8%, and the won traded near 1,456 per dollar.

Hosts described the pace of the rally as unusually fast. Korea's stock market posted roughly a 75% return last year, the best among major global markets, and this year it has matched that same 75% year-to-date gain in just about five months. Goldman Sachs noted that Korea is showing the strongest earnings-upgrade momentum in the Asia-Pacific region.

The sharp rally also raised bubble concerns. Over the past month, the most heavily bought ETF among retail investors was actually an inverse product betting on a KOSPI decline. The hosts advised that the basic rule of investing is not to sell a rising stock and to sell only once it falls, cautioning against worrying about a downturn prematurely in a rally. On Warren Buffett's recent remark at Berkshire Hathaway's shareholder meeting that the market looks like an overheated casino, they countered that the comment comes from someone who holds not a single share of Korean stock, and that Korea's earnings growth is fundamentally different from a bubble.

Samsung Electronics and SK Hynix Both Hit Record Highs

Samsung Electronics climbed to 265,500 won, up about 15% in a single day, lifting its global market-cap ranking to 11th place at roughly $1.1 trillion. SK Hynix also ranked 16th globally in market cap at about $770 billion, valued above Micron Technology.

The memory chip rally is also linked to the US market. About half of a US-listed memory-sector ETF is made up of Samsung Electronics and SK Hynix, so gains in that ETF feed back into further buying of the two stocks, and the ETF itself has risen more than 70% over the past month. With new channels recently opened for foreigners to directly buy the two stocks, interest in Korean chipmakers is reportedly growing within US investor communities as well.

Apple's Foundry Diversification and the Chip Supercycle

Reports emerged that Apple is considering having Samsung Electronics and Intel produce its self-designed M-series chips in order to reduce its dependence on TSMC. The ability to manufacture within the US is cited as a key factor, and expectations around Samsung's foundry business are seen as the reason Samsung outperformed SK Hynix today.

The hosts noted that the fact global tech giants like Apple and Tesla are increasingly turning to Samsung Electronics and SK Hynix for cooperation marks a fundamentally different phase from the past. With Samsung's foundry business, long burdened by losses, now showing a possible path to profitability alongside its memory business, some argued that the company's overall valuation deserves a re-rating.

US chipmaker AMD backed up the optimism with its own earnings. AMD's revenue topped $10 billion, beating market expectations, and data center revenue grew 57% year over year. Next-quarter guidance also came in above forecasts, reaffirming that the AI investment cycle remains solid. Cumulative capital spending by major US tech giants through year-end was cited in a recent Goldman Sachs estimate at roughly 1,000 trillion won.

Push for MSCI Developed Market Status

News also broke that Korea is pushing to gain MSCI watch-list status for developed-market inclusion as early as June. This comes alongside regulatory reforms lowering entry barriers for foreign investors, including easing personal-information disclosure requirements for foreign trades and expanding omnibus accounts for foreign investors. If Korea is included in the developed-market index, its weighting is expected to be around 2-3%, with resulting passive fund inflows estimated at roughly $40 billion, or about 40-60 trillion won.

There was also news that the ability to directly buy Korean stocks through overseas brokerages may soon extend to Hong Kong. This would widen the channel for capital flowing into the Korean market via Hong Kong, a major Asian financial hub, and is expected to be an additional tailwind for foreign investor demand.

The Warning Behind JR Global REIT's Near-Default

JR Global REIT, Korea's first publicly offered overseas real estate REIT, has effectively been pushed to the brink of default. The REIT owns and operates an office building in Brussels, Belgium, and after the pandemic accelerated remote work and reduced demand for commercial offices, the building's value was sharply written down in a reappraisal. As a result, the loan failed to meet its collateral ratio, prompting lenders to move to capture rental income first, and the REIT ultimately failed to secure roughly 40 billion won in refinancing, leading to a near-insolvency filing and a trading halt.

The case illustrates that paying a dividend alone does not guarantee investment safety. If the source of a dividend is eating into the underlying asset, it is not a safe dividend, the hosts warned. They also noted that in the AI era, demand for data centers is rising while the role of traditional commercial office space may shrink, making it worth reassessing the risk in investments tied to commercial real estate.

This points to a broader lesson. Many investors expect that once a major variable like the war is resolved, markets will simply revert to how they were before, but just as the pandemic showed, the world looks different after such large events pass. The commercial real estate market is a prime example, and investors were advised to keep in mind that the months ahead will not simply be a repeat of the past.