When Everyone Waits for October, Foreigners Move First | Lee Ji-hwan, CEO of Aurora Investment Advisory

Summary

Lee Ji-hwan, CEO of Aurora Investment Advisory, argues the Korean market is not at a point to retreat despite a sharp summer selloff and heavy macro noise. He views the latest Fed hike as a late-cycle completion rather than a new tightening cycle, dismisses AI speed-control fears as regulatory positioning, and expects foreign long-term funds to return to Korean semiconductors before the October consensus. He favors Samsung Electronics, SK hynix, semiconductor equipment/materials, and power/cable/optical infrastructure, while treating oil as a range-bound macro risk.

• Macro negatives including the Fed hike, high long-term yields, oil, FX, and AI speed-control concerns were largely exhausted this week.
• Lee says the market held up better than expected and may have bottomed; he does not recommend retreating.
• He expects foreigners to buy Korean equities and Samsung before October, with staggered purchases before and after Chuseok and in October.
• He favors Samsung Electronics and SK hynix due to long-term contracts, valuation re-rating, buybacks/shareholder returns, and expected foreign inflows.
• Semiconductor equipment/materials should follow leaders, with front-end preferred over back-end; Japanese equipment/materials exposure is also favored.
• Power, cables, and optical communications are highlighted as the intersection of AI data-center momentum and infrastructure policy.
• Oil is seen as range-bound around $90-110 unless the US-Iran conflict becomes a full ground war; de-escalation could come around the UN General Assembly.
• Lee also discusses investor psychology, arguing that discipline comes from preset manuals rather than willpower.