00:02You're listening to AI Prism from Seoul Economic Daily.
00:32Korea's ultra-long government bonds are now yielding above 4.5 percent, a level institutional
00:39investors are calling attractive, even with global rates under pressure.
00:43And Supermicro just told markets its quarterly revenue will jump nearly fourfold on AI server
00:50demand, a signal already pushing 2027 price forecasts for Korean-made high-bandwidth memory
00:57higher.
00:57It's Thursday, October 22, here's why global investors are paying attention to Korea
01:04today.
01:05Institutional investors had been overweight equities for five straight months, and September's
01:11risk appetite reversal marks the first real pause in that run.
01:15Capital didn't move to cash, it moved into bonds, with non-short-term bond allocations
01:21rising nearly a full percentage point, the biggest jump in five years.
01:25Korea sits at the intersection of both trends, a semiconductor-driven equity rally now unwinding,
01:33and government bonds becoming more attractive as yields climb.
01:36Here's what the numbers show.
01:40$818.36 trillion won, about $617.4 billion, is how much Samsung and SK Group's stocks lost
01:50in three weeks, as the Cosby fell from 7,000.74 to 5,735.66.
01:58SK Group's market cap fell 28.61%, outpacing Samsung Group's 17.37% decline, largely on SK Hynix's
02:10399.6 trillion won drop.
02:15Macro uncertainty is driving emerging market equity allocations lower, pulling capital out
02:21of both Korean stocks and Korean government bonds at the same time.
02:25Above 4.5%, that's where Korea's ultra-long government bond yields now sit, a level State Street's own analysis
02:34calls attractive to institutional investors, despite global rate pressure.
02:39Foreign demand for Japanese government bonds hit a seven-month high in mid-September,
02:44reinforcing a positive outlook on the yen as part of the same regional rotation.
02:50Supply constraints are pushing 2027 high-bandwidth memory price forecasts higher,
02:56a direct tailwind for Korean chip exporters, even as near-term sentiment stays negative.
03:03$185 to $195 billion, Supermicro's new first-quarter revenue guidance, roughly 3.8 times its year-ago total,
03:13and well above the $14.95 billion consensus.
03:18Korea's won has held up better than other emerging market currencies on exporter dollar selling,
03:24but continued outbound stock buying from Korean investors could push the dollar-won rate gradually higher into year-end.
03:32So what does this mean for global investors watching Korea?
03:36Earlier, we said foreign and institutional money pulled out of both Korean stocks and government bonds together.
03:43Here's what that actually means for you.
03:46The simultaneous outflow suggests broad de-risking rather than a Korea-specific call,
03:52which matters for how temporary the pullback might be.
03:56The memory chip tailwind from rising HBM prices argues against an outright underweight on Korea,
04:03even as near-term volatility and a softer won argue for keeping hedging costs in the calculation.
04:10Watch the Bank of Korea's October rate decision and its inflation outlook for clues on whether a November hike follows.
04:17Watch Samsung Electronics and SK Hynix's upcoming earnings for whether the memory price tailwind shows up in guidance.
04:26And watch the spread between Korea's 10-year and 30-year government bonds, which reduced issuance could narrow further.
04:33That's today's AI Prism Global Investors.
04:37This episode was produced with AI assistance based on Seoul Economic Daily reporting and reviewed by a human editor.
04:45AI Prism is a Juan Ifra Award-winning series.
04:48We'll be back tomorrow.
04:50You've been listening to AI Prism from Seoul Economic Daily.
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