Korean

• The KOSPI index plunged 20% in July, driven by extreme market volatility and high-risk leveraged bets by South Korean retail investors. • Investors are utilizing massive amounts of borrowed cash, with margin loans totaling 34.37 trillion won ($23 billion) this week, following a June peak of 38.6 trillion won. • Market instability is further fueled by concentrated bets in leveraged ETFs, such as a Hong Kong-listed SK Hynix fund that has grown 20-fold this year to $7.78 billion.

• South Korean retail investors have poured billions into leveraged bets on AI-related stocks, shifting the market from a stable bellwether to a high-volatility "AI frenzy." • As of July 17, margin loans remain high at 34.37 trillion won ($23 billion), following a June peak of 38.6 trillion won. • A Hong Kong-listed, twice-levered SK Hynix fund has surged over 20 times since the start of the year to reach $7.78 billion, becoming the largest of its kind globally.

• South Korea's stock market is increasingly influencing global equity trends due to the dominant role of AI-driven semiconductor companies. • Industry giants SK Hynix and Samsung Electronics are central to this shift, serving as pivotal suppliers of the high-bandwidth memory chips essential for AI infrastructure. • This trend matters because the performance of these Korean tech firms acts as a bellwether for the broader global AI trade and semiconductor demand.

• South Korea’s $4 trillion equity market has emerged as a critical early indicator of global risk appetite and AI sentiment. • Market swings in semiconductor giants Samsung Electronics Co Ltd and SK Hynix Inc are now driving trends across global AI and chip stocks. • Fund managers in major financial hubs, including New York, London, and Tokyo, are increasingly monitoring the Kospi index before their own domestic markets open.

• US and South Korean tech stocks faced significant volatility and declines as US Treasury yields surged beyond 4.6%. • J.P. Morgan Asset Management reports that TSMC has achieved record-high revenue, asserting that the current demand for AI is not a bubble. • Taiwan's corporate earnings growth is projected to reach 27.4% in 2027 and a remarkable 43.3% by 2026, driven by semiconductor exports.

• Samsung Electronics has finalized key preparations to manufacture Tesla's AI5 chip, with production expected to begin at its Texas foundry in late 2026. • The South Korean government is developing a free nationwide AI chatbot and public-service agent to provide personalized assistance and bridge the digital divide. • South Korea, the United States, and Japan are collaborating on joint small modular reactor projects to enhance energy security across the Indo-Pacific region.

• A South Korean court has sentenced ousted President Yoon Suk Yeol to two years in prison for his involvement in a polling scandal. • The court found that Yoon illegally received manipulated opinion polls for free from a political broker to potentially aid his political standing. • This ruling highlights the legal consequences for electoral manipulation and the misuse of political influence within the South Korean government.

• Foreign investors continued to be net sellers of South Korean equities in June, marking the fifth consecutive month of outflows. • This trend persisted despite a significant tech-led rally within the local stock market during the same period. • Data released by the Bank of Korea on July 14 highlights a disconnect between rising stock prices and foreign investor sentiment.