Surprise Two-Year Profit Forecast Sparks Interest in Samsung Electronics at 250,000 Won

[Anchor]

Let us take a closer look at the background and outlook behind the extreme volatility in the stock market with Editorial Writer Park Jin-ho.

Q. Record Rebound Following the Plunge: What Was the Background?

[Park Jin-ho / Editorial Writer: As reporter Min Kyung-ho well reported earlier, the resolution of the massive stock selling crisis by a U.S. hedge fund was the biggest factor. It served as a catalyst for foreign investors to turn from net sellers to net buyers after four consecutive days of selling. Looking at the broader picture, the content of Samsung Electronics' conference call yesterday and the earnings release by U.S. big tech company Amazon early this morning set the stage. In particular, Samsung Executive Vice President Kim Jae-jun clearly pointed out that 70 percent of DRAM semiconductor volume has been secured through long-term contracts of five years or more, and that supply will remain tight in 2028, the year after next. This effectively dispelled recent debates over a semiconductor peak. Additionally, Amazon's earnings, which had been considered the most lagging in the AI competition, exceeded expectations. In particular, cloud services saw their strongest revenue growth in four and a half years, driven largely by CEO Andy Jassy clearly declaring that capital expenditures on data centers—which the market has worried about the most—will start generating profits two years from now. This essentially provided an answer to the persistent anxiety over AI industry bubbles, addressing the question of when and how much profit will actually emerge if facility investments continue.]

Q. What Are the Issues with Single-Stock Leverage ETFs?

[Park Jin-ho / Editorial Writer: Public sentiment remains negative, but the simultaneous launch of 16 highly speculative products at a time when the KOSPI market capitalization is concentrated around just two semiconductor companies was indeed problematic. When bad news broke, the decline widened, and retail investors who bought these products rushed to sell, which in turn triggered a sharp drop in the underlying stocks and dealt blows to the entire index for days. An even bigger problem is that the market has become highly favorable for so-called ultra-short-term trading by foreign investors, known as high-frequency trading (HFT), which the financial market is also closely watching. Because this utilizes computer algorithms to execute massive trades in microseconds—faster than a second—there are strong suspicions that they are rapidly pushing up prices, inducing retail investors to pile in, and then selling off to pocket profits in a very short span of time. Therefore, criticisms are inevitable that preparations, such as preliminary simulations, were lacking even if the original purpose was defending the exchange rate.]

Q. How Should Retail Investors Respond?

[Park Jin-ho / Editorial Writer: As everyone knows, the KOSPI remains undervalued. It is similar to the period of the COVID-19 pandemic six years ago. Thus, there is ample room for growth, but anxiety remains the problem. Since many investors bought in when the index was around the 6,500 level today and Samsung Electronics' stock was around 250,000 won, there is a possibility that so-called principal-defense selling pressures will emerge. Consequently, some projections suggest it may take more time for a turnaround into an upward trend. Another concern is that the National Pension Service failed to sufficiently reduce its domestic stock weighting during the market peak in May and June, leaving it with insufficient purchasing power to support the market in the current situation. Furthermore, concerns are rising that the government's leverage ETF measures will have limited practical effectiveness since foreign investors are not subject to them, highlighting the need to devise measures against the aforementioned market-distorting activities.]

(Video Editing: Kim Yoon-sung, Design: Cho Soo-in)
※ Please note: This article was translated by AI and may contain errors.