Big Tech Bond Bomb Explodes! Prolonged High Interest Rates Unavoidable… After Samsung Electronics and SK Hynix Credit Balances Are Wiped Out, the 'Second Rally' Begins | Kiwoom Securities Researcher Han Ji-young

Summary

Han Ji-young of Kiwoom Securities explains why high interest rates may persist, arguing that government deficits and Big Tech AI-related debt issuance will keep long-term market yields elevated. He is constructive on KOSPI above 7,000 and on Korean semiconductors after Nvidia earnings, while also favoring shareholder-return sectors, especially financials. Autos are attractive but better after FX-driven estimate revisions, and the market is described as a rotational environment into year-end.

• Han Ji-young expects high rates and long-term market yields to stay elevated due to government deficits and Big Tech/AI debt issuance.
• He sees the Fed more likely to hold in September, with any hike possibly in December, and expects the Bank of Korea's terminal rate around 3.5%.
• KOSPI may break and settle above 7,000, turning that level into support as foreign investors lead the market into year-end.
• Korean semiconductors, including Samsung Electronics and SK hynix, are expected to recover further after Nvidia earnings removed cycle concerns; retail margin overhang should ease via price recovery.
• Shareholder returns are a key market axis, with financials such as banks, insurers, holdings, and securities preferred; autos are attractive but better after FX estimate cuts.
• The market is described as a rotational environment concentrated in AI infrastructure, shareholder-return sectors, and some consumer/cosmetics names; investors should avoid chasing daily moves.
• Portfolio rebalancing timing depends on risk appetite, with conservative investors waiting until after Chuseok.