Kospi Gives Back Gains a Day After First Breach of 9,000, as Samsung-SK Hynix Divergence Widens and MSCI Watchlist Re-entry Looks Unlikely

Kospi rallied as much as 2.4% to 9,282 in early trading, briefly nearing 9,300, before erasing most of the advance to close near flat, up about 0.1% at 8,974. Kosdaq, down 2.9% earlier, extended its decline to 4% before settling near the 960 level. Foreign investors trimmed net selling on the Kospi to roughly 40 billion won before turning net buyers, but continued institutional selling — particularly from securities firms' proprietary trading desks — offset the recovery.

The won weakened from the 1,530 range to about 1,537 per dollar after reports emerged that U.S. Vice President Vance postponed a planned visit to Switzerland for a signing ceremony following the Israel-Iran ceasefire, strengthening the dollar index. Iran was seen as effectively boycotting the signing over Israel's continued strikes on Hezbollah targets in Lebanon. The yen also slid past 162 per dollar in tandem.

Panelists noted a pattern of Israeli provocations clustering on Fridays when U.S. markets are closed, and said markets had already priced in some skepticism about Israel's reliability, limiting the shock. News of a Ukrainian strike near Moscow's oil facilities also surfaced, but crude held steady near $76 for WTI and the Strait of Hormuz remained open to traffic, suggesting geopolitical tension had not escalated into a new acute phase.

Kosdaq's steeper decline was attributed to its structurally thinner foreign ownership — dominated by domestic retail investors — and heightened rate-sensitivity concerns, since many Kosdaq-listed firms are valued on future growth rather than current earnings. Goldman Sachs flagged rising leveraged ETF balances in Korea and Taiwan as a contributor to recent volatility, and panelists said the market had grown accustomed to a now-familiar pattern of automatic rebalancing, index-weight adjustments, and profit-taking the day after a sharp rally.

Addressing investor frustration over feeling gloomy the day after a record close, panelists argued it is natural for Kosdaq-only holders to feel relatively deprived, but stressed that investing means going with the market's flow rather than concluding the entire market is broken because one's own holdings lagged. They urged investors to stay the course ahead of next week's earnings season.

Panelists strongly pushed back against a Bloomberg article grouping SpaceX with Samsung Electronics and SK Hynix as stocks whose prices defy traditional valuation logic. While SpaceX's premium arguably rests on Musk's vision rather than earnings, Samsung and SK Hynix are fundamentally different because their valuations are backed by actual profits.

Based on forward earnings estimates, Samsung's forward P/E stands at roughly 6.5x and SK Hynix's at about 7x — both lower than Micron's 10.3x. Panelists noted that Micron, curiously, was not even mentioned in the article for comparison, and called it illogical to label a stock trading at 7 times forward earnings a meme stock.

They also disputed the article's warning that memory chips' short cycle could trigger a 2023-style crash, arguing that long-term supply agreements now provide downside protection and that a supply shortage is broadly expected to persist through 2028 — a fundamentally different environment from the past cycle the article implicitly relied on.

Panelists said the episode underscores the need to evaluate news based on the underlying figures and logic rather than a publication's reputation, warning that treating any headline from a prestigious outlet as authoritative — regardless of its rigor — can mislead investors into thinking a stock has peaked.

On why SK Hynix has rallied sharply while Samsung Electronics has lagged, panelists pointed to structural differences between the two. SK Hynix's simple, transparent exposure to AI-driven HBM demand makes it easy for investors to price, much like Micron or Kioxia, while Samsung's diversified portfolio — spanning semiconductors, home appliances, and foundry — dilutes the visibility of its memory upcycle. Recent labor-related noise around a strike was also cited as a temporary drag on Samsung shares.

Still, panelists argued both stocks retain distinct strengths over the longer term. SK Hynix benefits from being seen as foreign investors' top pick amid its pending U.S. ADR listing, while Samsung's appeal lies in sheer earnings volume. With quarterly operating profit expected to rise from roughly 57 trillion won in Q1 to around 90 trillion won in Q2, a company generating 100-200 trillion won in quarterly operating profit commands resources for virtually any reinvestment or acquisition.

Panelists reiterated that investing is a battle of absolute profit, not return rate — institutional investors compete on returns to attract fund inflows, but individual investors should focus on actual gains in won terms. They noted that the average Korean brokerage account holds only around 10 million won in cash, and urged investors not to fixate on relative underperformance within the same sector.

Samsung shares fell more than 1% to around 358,000 won on the day. The combined market cap of Samsung and SK Hynix topped 4,000 trillion won, with SK Hynix alone surpassing 2,000 trillion won. Top foreign net-buy names included SK Hynix, Samsung Electro-Mechanics, LS Electric, Hyosung Heavy Industries, HD Hyundai Heavy Industries, and Samsung C&T.

Hyundai Motor Group is reportedly moving to acquire SoftBank Group's remaining roughly 9.65% stake (or a related 5% call option) in Boston Dynamics, bringing its ownership to 100%. With SoftBank's option exercise deadline approaching, Hyundai's board is expected to finalize the decision, adding to the stake already held by Chairman Euisun Chung and Hyundai Glovis through HMG Global.

The move stems from an original deal provision allowing SoftBank to sell its stake if Boston Dynamics failed to go public by a set deadline, with the exercise price fixed at the time of the original 2020 transaction — reportedly well below current valuations. As market estimates of Boston Dynamics' worth range from tens of trillions of won to over 100 trillion won, the deal is seen as a bargain acquisition of the remaining stake.

Panelists welcomed the move as strengthening Hyundai's control over a key robotics asset ahead of a potential IPO, allowing the group to capture future value appreciation rather than ceding it to SoftBank. They also framed it as an opportunity for Hyundai to expand its global footprint beyond automaking into the broader robotics ecosystem.

Ahead of MSCI's annual market classification announcement next week, pre-released rebalancing assessment data suggested Korea is unlikely to be added back to the developed-market watchlist. Entry requires meeting three broad criteria — economic development, size, and market accessibility — and while watchlist inclusion typically requires no more than two 'needs improvement' ratings across detailed sub-criteria, Korea reportedly received five.

Specific shortfalls cited included the announced but not-yet-implemented 24-hour FX market, confusion from running a new simplified foreign-investor registration code alongside the existing IRC system, concerns that stronger enforcement against naked short selling may be chilling legitimate covered short selling, and English-language disclosure requirements not set to fully take effect until 2027.

Panelists noted these criteria involve significant subjective judgment rather than mechanical scoring, and questioned whether Korean authorities had engaged sufficiently with MSCI to explain reforms already underway. Some also suggested MSCI operator Morgan Stanley — rescued by Japanese capital during the global financial crisis — has historically applied a comparatively stricter standard to Korea relative to Japan.

Even so, panelists said the practical market impact of a failed watchlist bid would be limited. While developed-market inclusion would eventually draw an estimated 50 trillion won in net inflows, that sum carries far less relative weight now that Korea's market cap has grown to about 8,000 trillion won. They also noted offsetting factors, including outflows from emerging-market-tracking funds and the exclusion of smaller-cap names once minimum market-cap thresholds rise under developed-market classification.

Park Si-dong raised concerns about the credibility of Korea's official housing statistics, citing the Korea Real Estate Board's weekly apartment price index. While Seoul and Gangnam district apartment prices showed a sharp recent rise, fewer than 40 apartment transactions were actually recorded in Gangnam through June. He noted the index is still published weekly because the methodology substitutes seller asking prices for actual transaction data when trades are scarce.

Since sellers rarely lower their asking prices, this approach is structurally biased toward showing price increases, he argued. This official index is then cited by media outlets reporting on soaring prices, amplifying market anxiety and even influencing policy decisions despite resting on largely unverified asking prices.

He highlighted a recent press briefing in which the newly appointed head of the Korea Real Estate Board responded to questions about the asking-price-based methodology by suggesting that calling it 'asking prices' might hurt surveyors' feelings. Park called this response an inappropriate deflection for a public agency chief and argued such complacency undermines the government's broader real estate reform push.

As remedies, he proposed halting the weekly index when it relies on asking prices in place of actual transactions, and substantially expanding investment in real estate research capacity to build genuinely reliable statistics. He contrasted this with the U.S. and U.K., where official statistics reflect only bank-verified mortgage prices or attorney-confirmed transaction prices rather than unverified asking prices.