Treasury Bond Buyback Effect Limited; Samsung Electronics' Shareholder Returns in Focus — Today's Market Drivers

The S&P 500 recently rose faster than its historical average pace. Investors took profits, and a partial pullback rally followed.

The Nasdaq is recovering in August after the chip-sector correction in July. However, rivalry among companies within the tech sector is still intensifying.

The implication is that only a temporary market stabilization can be expected.

Rising corporate bond issuance puts pressure on Treasury yields to climb again. Without a long-term outlook for rates to hold or fall, a decline in yields is hard to expect.

CEO Yoon Jin said, "Unless the Fed, the ultimate bond issuer, makes a direct move, the Treasury's actions carry these limits. That's why we can only read this as temporary."

High financing rates on corporate bond issuance are a major factor raising companies' cost burden. Such rate increases push cloud companies to adjust their total orders, which directly feeds into chip companies' revenue and weighs on them.

CEO Yoon Jin explained, "If financing rates are affected, cloud companies can adjust their spending, but for chip companies, total order volume simply gets tied to rates, much like the situation today." He added that this structure resembles the effect of rates on the real estate market.

Marvell has posted industry-leading average annual revenue and earnings growth, drawing attention for AI chip growth. This growth has quickly raised expectations for its valuation.

However, its valuation burden is significant, with higher price-to-earnings, price-to-sales, and price-to-book ratios than rivals such as NVIDIA. For this reason, it may become a target for short positions in the near term.

Broadcom is rated among the companies with the highest valuations, above NVIDIA's. This reflects its position as the number three player in the AI chipset market and the high valuation it commands relative to rivals.

Such a high valuation is making Broadcom a major short-position target.

Investors have recently expanded their holdings in major healthcare groups such as IBB and HCRX. They are increasing exposure to healthcare companies including Moderna, focusing on AI-driven mRNA recombination and cancer-targeting technology.

One expert said, "We put a lot of money into major healthcare groups like IBB and HCRX this quarter."

Technology is being replicated quickly among top-tier companies, so single stocks carry volatility risk.

An expert advised, "For companies like these, the most realistic approach is usually to group the mRNA companies together and invest in the whole sector basket."

Analysts argue that past asset-classification formulas no longer fit current market conditions.

Bitcoin, gold, and bonds are being newly classified as alternative assets that attract inflows during equity pullbacks. This signals the need to change investment strategy to prepare for market volatility.

Demand for AI semiconductor chipsets keeps rising, but supply remains constrained by bottlenecks. These bottlenecks are expected to persist until roughly the first half of 2027.

One expert said, "Demand for AI chipsets keeps climbing while supply is still stuck in a bottleneck, so the practical peak of this bottleneck will be around the first half of 2027."

Afterward, expanded HBM supply from China is expected to stabilize prices and ease inflationary pressure.

An expert forecast, "The market is likely to hear remarks that keep open the possibility of a hold or even a cut if additional positioning is not strictly necessary."

There is particular expectation that remarks by Chair Warsh could reverse part of the recent rise in Treasury yields.

Excessive concern among memory companies is ultimately tied to the possibility that AI capex (capital expenditure) investment could slow. This is seen as a root cause of the stock market decline.

As hyperscalers rely more heavily on external funding, rising rates could increase their corporate bond interest burden. Concerns are being raised about a shift toward more conservative capex spending around 2027.

This could act as a positive signal for the market.

However, as the link between rate changes and Treasury yields grows stronger, it could become a burden on capex spending. This calls for a reassessment of AI investment sentiment.

Samsung Electronics plans to present its shareholder return policy for 2027 through 2029 next year. Under the policy confirmed so far this year, about 50% of free cash flow (FCF) is allocated to shareholder returns. Of roughly 260 trillion won in FCF, that comes to about 130 trillion won.

Based on this policy, Samsung's dividend yield at the market price is expected to reach 5 to 7%. It is seen as offering more shareholder return appeal than SK hynix, raising investors' attention to Samsung Electronics.

Expert Byeon Young-in said, "Samsung now needs to present its policy for 2027 through 2029 next year. Looking at the shareholder return policy confirmed through this year, FCF, or free cash flow, has been fixed at around 50%, so 50% of about 260 trillion won is roughly 130 trillion won."

Given current market volatility, adding fundamentally strong, high-payout stocks remains valid rather than chasing theme-driven stocks that move on short-term issues, analysts say.

An expert emphasized, "Considering all this, buying into fundamentally strong, high-dividend-payout stock groups on dips is still valid, rather than stock groups that move on theme-driven flows and short-term issues."

Companies that strengthen their shareholder return policies, like banks and Taiwanese firms, may see improved foreign investor flows.

During the clinical trial of APB-A1 from AprilBio, the search for new indications changed course after efficacy could not be confirmed. This is not a return of a licensing (technology transfer) deal, but it has pushed the pipeline down the ranking and raised concerns about credibility.

An expert said, "Coolly speaking, this is not a return of a licensing or technology transfer, but the path for indication exploration has changed. Even if the substance is used to expand indications, it will inevitably take more time. So I would coolly say it is bad news."

Even if the substance is used to expand indications, it will take longer, so the news should be coolly treated as negative.

The agreement POSCO Group signed with Longbai is a memorandum of understanding (MOU), not a definitive contract. It mainly increases the possibility of entering the lithium supply chain.

However, ultimate success depends on whether it leads to commercialization results and order wins. Experts say lithium prices would need to break above 200 yuan for the stock rally to continue.

An expert said, "The agreement signed yesterday with Longbai is not a definitive contract but an MOU. It means entering the supply side has become more significant. If it focuses on commercialization results and leads to order wins, POSCO Holdings could be the biggest beneficiary."