KOSPI Volatility Index Falls as Samsung Electronics and SK hynix Lead Gains

The index once climbed to 90 but is now in the mid-70s, and analysts say something important is changing in the market. A sustained decline in the volatility index could lead to a meaningful recovery in South Korea's stock market, according to a positive outlook.

As leveraged investing shrinks, overall market volatility is falling, according to analysts. This can be read as a positive sign for the market's health.

Many investors are curious about the background to Samsung's gains, and various speculations are circulating in the market.

Experts offer two possibilities: there is a concrete reason that will soon come to light, or the rise is driven by flows from a particular investor. For now, the possibility of undisclosed positive news cannot be ruled out.

Following the president's 'blitzkrieg' remarks, expectations for Samsung Electronics' investment in Gwangju have grown, and related stocks have hit their upper limits and are showing strength. However, some argue it is uncertain whether these Gwangju investment expectations are directly linked to Samsung Electronics' own share price gains.

Big Tech companies are changing how they finance AI infrastructure, especially data center construction. They previously invested mainly with their own funds, but are now actively bringing in outside investment. This shift is analyzed as possible because investing companies will commit capital regardless of its source as long as returns are expected. The change is expected to form new capital flows in the AI infrastructure market.

This is interpreted to mean that GPUs and data centers themselves have acquired independent financial value. Alongside the shift in how Big Tech funds AI infrastructure, this shows the financial sector's changing view of related industries. Such a change in perception could lead to expanded investment in AI-related industries and the launch of new financial products. Ultimately, the advance of AI technology is elevating hardware infrastructure from a mere consumable to an independent investment asset. This could have a positive effect on the fundraising of related companies. As they are classified as investable assets, institutional investors' interest is also expected to rise.

Both companies are seen as posting solid results that will meet market expectations.

Automobile exports have been confirmed to have plunged 80.9% from a year earlier. As curiosity grows about the causes of this sharp decline, a proposal has emerged to improve how the Korea Customs Service publishes its statistics. Rather than just tallying and reporting export figures, the agency should also provide the specific reasons behind increases or decreases to the public, the proposal argues. This is expected to improve understanding of the statistics and help market participants and policymakers analyze the current situation more accurately.

SK hynix has suddenly announced it will halt purchases of bonds it had planned to issue, drawing close market attention. Originally, SK hynix operated one-year short-term bonds but had recently been about to switch to three-year bonds. The market interprets SK hynix's halt in bond purchases in two ways. One is dissatisfaction with market 'noise'; the other, according to analysts, is a move to secure liquidity rather than locking funds into three-year bonds, to build cash for future shareholder return policies. In the latter case, there is growing investor anticipation that SK hynix could announce a shareholder return policy soon.

Speculation about an initial public offering (IPO) of Solidigm, an SK hynix subsidiary, continues to surface. In particular, media outlets including Chosun Ilbo have reported very specific details, such as which company would acquire it and what stake would be taken, leading to growing views that an IPO is becoming more likely. Alongside suspicions that these reports are based on insider information, there are whispers that SK is trying to list its AI-related business units on the Nasdaq. Reports that a dual listing is possible and that consultations with the government are underway have further raised the likelihood that the Solidigm IPO will actually proceed.

Based on the Financial Services Commission's interpretation of its dual listing ban, many analysts argue Solidigm could fall under an exception. Opposing views are also strong, however. Because Solidigm was acquired with money from SK hynix shareholders, critics argue it should be treated as a dual listing regardless of where it lists. In other words, it is inappropriate to conclude it is not a dual listing simply because it is a U.S. company. Whether the Solidigm IPO can avoid the dual listing controversy is likely to be the key issue going forward.

The core of the act is to separately create a new 5 trillion won semiconductor fund that focuses investment on promising materials, parts and equipment (SOBU) companies and fabless firms, and to pursue a 'Growing Together Project' worth 1 trillion won over the next 10 years, under which large companies and small and mid-sized firms cooperate from technology development through demonstration to mass production. The government also plans a separate special act to shorten permit and environmental impact assessment periods, aimed at removing regulations that hinder regional investment. It said it would launch investment projects worth over 200 trillion won in the Chungcheong region and over 100 trillion won in the Yeongnam region within this year, and would pursue temporary relocation of Gwangju's military airbase by the second half of 2028. Buoyed by the government's sudden support for the semiconductor industry, chip equipment stocks are broadly strong today.

The president stressed that a 'semiconductor special act' should streamline all procedures in one stop so as not to miss the golden window for the semiconductor industry. Pointing out that in Japan it takes only 1 year and 10 months from factory construction to operation, while in Korea environmental impact assessment alone takes 2 to 3 years, he expressed determination to eliminate such inefficiency through the special act.

Trees can grow in the deserts of Saudi Arabia and the UAE thanks to seawater desalination technology, and it was emphasized that Korean construction companies have built the most such plants. The water shortage problem can be fully overcome by building desalination facilities, with the issue being only one of cost, and an optimistic outlook was offered that Korea's excellent technology can solve it. Expectations were also voiced that if the president leads major change, these problems could be resolved quickly.

Some voice concern that the market could drop sharply again once the volatility index declines, and the absence of such discussion leaves a sense of regret.

Samsung Electronics widened its gain to 5%, touching the 240,000 won level. SK hynix also turned positive, rising in the 4% range. With the two domestic IT heavyweights both strong, they are leading the KOSPI index higher, and their joint rally is having a positive effect on the broader market.

Market anxiety is shared not only by individual investors but also by experts, it appears. The fact that even experts, whom investors regard as great mountains, are patiently waiting through the same situation has been a major comfort to many. As a sense of shared struggle takes hold, investors are gaining the courage to endure difficult market conditions.