KOSPI Reclaims 6000 Level After 10 Trading Days
The stock market rallied thanks to a boost from SK Hynix. The KOSPI index surged over 6%, recovering the 6000 mark for the first time in ten trading days. This increase followed SK Hynix's announcement of record earnings and a large shareholder return plan. Analysts suggest this marks a turning point for the domestic market, which had seen foreign capital outflows and supply-demand gaps over the past month.On October 28, the Korea Exchange reported that the KOSPI closed at 6012.44, up 374.10 points (6.63%) from the previous trading day. This is the first time the index has surpassed 6000 since October 14 (6008.81). During the day, the index peaked at 6032.28. The total market capitalization of the KOSPI also increased by 314 trillion won compared to the previous day. The KOSDAQ index also rose by 27.45 points (3.69%) to close at 771.28.
SK Hynix was the main driver behind the market surge. Following its record quarterly earnings and a massive shareholder return plan worth 100 trillion won, the company's stock price jumped by 14,600 won (10.89%) to 1,487,000 won. Samsung Electronics also saw a rise, closing at 242,000 won, up 20,000 won (9.01%), amid expectations of additional shareholder returns. Other leading stocks in the semiconductor value chain, such as SK Square (11.23%) and Samsung Electro-Mechanics (8.74%), also experienced significant gains.
Major Firms Face Low PBR Concerns Ahead of Upcoming Disclosure
The Korea Exchange's announcement of companies with low price-to-book ratios (PBR) is just a week away. Major firms like Hyundai Steel and E-Mart are under scrutiny as they rank among the lowest in their sectors.According to data from the Korea Exchange's listing disclosure system, a total of 224 companies were identified as being in the bottom tier of their sectors based on PBR at three points: the end of June 2023, the end of 2024, and the end of 2025.
In the KOSPI market, 132 companies were consistently in the bottom 25% across sectors, while 92 companies in the KOSDAQ were in the bottom 10%. Hyundai Steel (0.19), Lotte Chemical (0.20), E-Mart (0.17), and Hanwha Life (0.21) were all below their sector's thresholds and are expected to be classified as low PBR companies for the end of 2024 and 2025.
The Exchange will publicly disclose the list of low PBR companies on November 2. Companies that fall into the bottom 25% in the KOSPI and the bottom 10% in the KOSDAQ over six consecutive quarters will be included. Selected companies will be listed on the Korea Exchange and will have related indicators introduced in brokerage home trading systems (HTS) and mobile trading systems (MTS).
Companies that submitted PBR improvement plans by October 22 will be exempt from disclosure for one year. According to the Exchange, 62 companies submitted plans, including 34 from the KOSPI and 28 from the KOSDAQ. However, Hyundai Steel, E-Mart, Lotte Chemical, and Hanwha Life did not submit any improvement plans by the deadline. It remains uncertain whether these companies will be included in the final list. The first disclosure will also apply exceptions if a company's PBR exceeds the sector's threshold as of October 22.
Analysts believe this earnings announcement could restore confidence in structural fundamentals beyond just strong performance. Lee Jae-won, a researcher at Yuanta Securities, stated, "The essence of SK Hynix's earnings announcement is the visibility of demand through 2029, which offsets concerns about the sustainability of AI investments and memory profit peaks. This could lead to continued foreign net buying."
President Lee Criticizes Media for Misrepresentation
President Lee Jae-myung expressed dissatisfaction with media reports on October 27 and 28, claiming his statements were distorted or taken out of context. He demanded corrections and apologies regarding articles related to foreign workers and criticized reports suggesting he shifted responsibility for agricultural land surveys to Minister of Agriculture, Food and Rural Affairs Song Mi-ryung, questioning the media's ethical standards. He labeled some extreme claims surrounding prosecutorial reform as "irresponsible extremism."In a National Assembly meeting, President Lee clarified his comments regarding foreign workers, stating, "Given the serious unemployment issue in our country, we need to increase domestic employment through job support rather than relying on foreign workers, which do not significantly benefit the national economy as they remit their wages abroad."
Earlier, during a discussion on expanding public jobs, he remarked, "We must support agriculture, forestry, livestock, and fisheries. Bringing in foreign workers does not greatly help the national economy since they send all their wages back home." Following a report by Hankyoreh titled, "'Foreign Workers Do Not Benefit the National Economy'... Criticism of President Lee's Remarks Intensifies," President Lee directly raised the issue.
Financial Authorities Consider Additional Support for Second-Tier Banks
Financial authorities are reviewing support measures to improve the operating conditions of second-tier financial institutions, including mutual finance. They are considering incentives such as management evaluation points or regulatory relaxations based on inclusive finance and soundness management performance, with plans to announce measures as early as this year. The expansion of securities holding limits for savings banks, announced in February, is also under consideration for implementation in the fourth quarter.On October 28, financial authorities met with representatives from the second-tier financial sector to discuss their challenges and potential support measures. The aim is to reduce unnecessary regulations while promoting inclusive finance supply and soundness management based on the unique operational characteristics of each sector.
Specifically, they plan to assess the performance of inclusive finance by the end of the year and consider providing management evaluation points or regulatory relaxations to those with outstanding results. Incentives based on soundness management performance are also under review. However, the specific evaluation methods, target incentives, and implementation timelines have yet to be finalized.
Additionally, authorities are pursuing institutional improvements to expand the funding capabilities of savings banks. They are reviewing the implementation of the expanded securities holding limits announced during a meeting of savings bank CEOs in February, which would increase the stock holding limit from 50% to 100% of equity capital and unlisted stocks from 10% to 20%. This aims to diversify revenue sources by broadening funding options beyond loans to include corporate investments.
Samsung's Future Strategy Under Review as AI Supercycle Emerges
"We are in a desperate situation. The reality we face is severe, and the market is unforgiving." These were the words of Lee Jae-yong, chairman of Samsung Electronics, upon his appointment in October 2022. Four years later, Samsung Electronics is now the global leader in operating profit. The recovery of the semiconductor sector, which had suffered significant losses in 2023, has led to renewed focus on Chairman Lee's leadership, which has maintained a steady course in technology investment and business direction amid crises.On October 27, marking his fourth anniversary, Chairman Lee took over during a challenging management environment. He effectively assumed control after the sudden passing of former chairman Lee Kun-hee in 2014 but faced significant challenges, including imprisonment due to the 2017 corruption scandal. The Future Strategy Office, responsible for key decision-making at Samsung, was disbanded that same year. Even after the passing of the former chairman in 2020, legal risks persisted, and on the day he was promoted to chairman in 2022, he attended court instead of a ceremony.
Meanwhile, the semiconductor sector faced its own crisis. In 2023, the semiconductor division reported an operating loss of 14.88 trillion won, and the leadership in high-bandwidth memory (HBM), crucial for AI semiconductors, shifted to SK Hynix.
The external environment has also become increasingly challenging. The Trump administration in the U.S. intensified tariff pressures on key South Korean products like semiconductors and automobiles, while the U.S.-China tech rivalry has hindered operations in China.
New Weight Loss Drug 'Epe' Launches Amidst Competitive Market
The era of weight loss drugs has arrived. With the launch of the first domestically developed GLP-1 weight loss treatment, 'Epe' (active ingredient: epeglunatide), the competitive landscape is heating up as global pharmaceutical giants enter the market with next-generation weight loss drugs. The global weight loss drug market is projected to grow to $200 billion (approximately 265 trillion won), leading to intensified price competition and the race for new drug development.According to industry sources on October 28, Hanmi Pharmaceutical's 'Epe' will be prescribed in select medical institutions starting October 29. This domestic drug challenges the market dominance of Eli Lilly's 'Mounjaro' and Novo Nordisk's 'Wegovy' by offering competitive pricing.
Previously, 'price' was cited as a barrier to entry in the weight loss drug market. Both Wegovy and Mounjaro are not covered by health insurance, with monthly costs starting at around 200,000 won for the lowest dosage. According to IQVIA analysis, the continuation rate for weight loss drug usage drops below 30% after one year, and for patients facing high costs, it falls below 10%. The initial supply price for Epe is set at 129,800 won, about half the price of Mounjaro, which starts at around 270,000 won for the lowest dosage. The introduction of the relatively lower-priced Epe is expected to attract demand from patients who have hesitated or discontinued treatment due to cost concerns.
The competition in the domestic weight loss drug market is expected to extend beyond just three players. Global pharmaceutical companies are also advancing into clinical trials for oral medications and next-generation weight loss drugs with new mechanisms, seeking to counter the competition.
* This article has been translated by AI.
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