◆Major News from Ajou Economy
▷KOSPI rebounds 5.89% to reclaim the 6800 level thanks to SK Hynix
- After a sharp drop of 5.80% the previous day, the KOSPI index surged 5.89% in a single day, recovering the 6800 level, reflecting extreme volatility with a two-day fluctuation exceeding 700 points.
- Foreign investors led the rebound with a net purchase of 2.28 trillion won, triggering a buy-side circuit breaker in the securities market at 9:06 AM, while the KOSDAQ also rose by 1.99%.
- The rebound was primarily driven by large-cap semiconductor stocks, with SK Hynix soaring 12.73% on plans for a 40 trillion won share buyback and cancellation. Samsung Electronics also rose by 9.49% amid expectations of significant shareholder returns.
- Global investment banks positively assessed SK Hynix's large-scale shareholder return, stating it could lead to a reevaluation of corporate value without undermining its AI investment capacity, maintaining their target prices and investment ratings.
- Analysts predict that the expansion of shareholder returns among large semiconductor stocks will support the lower end of domestic market valuations, and combined with the stabilization of U.S. Treasury yields, the upward trend may continue for the time being.
◆Key Reports
▷Gradual decline around 1400 won [Hanwha Investment & Securities]
- The won-dollar exchange rate is expected to face limited upward pressure around 1400 won for the time being, as concerns over further interest rate hikes by the Federal Reserve diminish due to slowing U.S. economic indicators, supporting a weaker dollar and a decline in the exchange rate.
- The domestic dollar supply effect from export companies' negotiations and foreign currency exchanges that drove the won's strength in July has weakened in August, but the reduction in foreign net selling of domestic stocks and inflows into Korean memory semiconductor ETFs are favorable for the won.
- The key drivers of the recent exchange rate have shifted from domestic supply and demand to expectations of U.S. Federal Reserve monetary policy and global dollar flows, making a sustained rise in the won-dollar exchange rate unlikely unless U.S. employment, consumption, and inflation indicators show significant improvement.
- The U.S. Treasury's expansion of its bond buyback program is also seen as a factor that could ease upward pressure on long-term interest rates and reduce the attractiveness of dollar-denominated assets, limiting the upper range of the exchange rate.
- With expectations of early interest rate hikes by the Bank of Japan stabilizing yen weakness, the overall conditions for Asian currencies are also favorable for the won, suggesting that the won-dollar exchange rate is likely to fluctuate gradually within the 1370-1430 won range rather than experiencing a one-sided decline.
◆Major Announcements After Market Close (August 20)
▷Sanil Electric signs a reactor supply contract worth 51.2 billion won
▷IBK Industrial Bank reports a 9.4 billion won financial fraud incident
◆Fund Trends (as of August 19, excluding ETFs)
▷Domestic equity funds: +34 billion won
▷Overseas equity funds: +9.8 billion won
◆Key Schedule for Today (August 21)
▷South Korea: Producer Price Index (July)
▷Japan: Consumer Price Index (July), Manufacturing PMI preliminary (August), Trade Balance (July)
▷Germany: Manufacturing and Services PMI (August)
▷Eurozone: Manufacturing and Services PMI (August), Consumer Confidence Index (August)
▷United States: Manufacturing and Services PMI (August)
* This article has been translated by AI.
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