Samsung Electronics and SK Hynix Are Aggressively Buying Back Shares... Why Are They Weak? / With FOMC Two Weeks Away, Will the Fed Raise Rates? | Shin Jungho, Head of LS Securities

Summary

Shin Jungho of LS Securities discusses why rate volatility is really a story about hyperscaler funding and then lays out his near-term rate view: US 10-year yields should stabilize and move lower after mid-September as data soften and FOMC scenarios play out. He sees KOSPI stuck in a rough 6,000-7,400 range through year-end, with September difficult and a possible retest of 6,000. On Korean semiconductors, he views SK Hynix's buyback as a floor but not an upside catalyst, and argues Samsung Electronics and SK Hynix can re-rate next year only if they prove shareholder returns and earnings sustainability.

• US 10Y Treasury yields are expected to stabilize and decline from above 4.7-4.8% toward below 4.5% around mid-September.
• The recent rate volatility is attributed to hyperscalers shifting AI capex funding from cash to debt.
• KOSPI is seen as rangebound, roughly between the low 6,000s and low-to-mid 7,000s, with a possible retest of 6,000.
• September's event calendar and Japan-related tightening are viewed as uncomfortable liquidity headwinds for Korean equities.
• The US Treasury buyback is viewed as insufficient as a market safety net without softer data or productivity gains.
• SK Hynix's buyback and cancellation supports the downside but cannot open upside until recurring shareholder returns are proven.
• Samsung and SK Hynix next-year upside is contingent on proving free cash flow discipline and shareholder returns, with Samsung's 5x PER offering re-rating potential.