NH Investment & Securities researcher Kim Byung-yeon stated on July 20 that the KOSPI index is unlikely to fall below the 6,000-point level even when accounting for all currently discussed negative factors in the Korean stock market. Speaking at a press conference held at the Korea Exchange in Yeouido, Seoul, Kim assessed that discussions about semiconductor sector peak-out remain premature. The analyst attributed current market pressure to overlapping concerns including semiconductor peak-out worries, China-originated artificial intelligence model uncertainties, and geopolitical tensions between the United States and Iran, while noting that a forward price-to-book ratio of 1.3x to 1.4x represents an appropriate floor level equivalent to KOSPI 6,000 points.
Kim Byung-yeon Sets KOSPI Stocks Floor at 6,000 Points
Kim Byung-yeon stated that the current situation reflects overlapping negative factors including semiconductor peak-out discussions, concerns about China-originated AI models, and geopolitical tensions between the United States and Iran. The researcher specified that a forward price-to-book ratio of 1.3x to 1.4x represents an appropriate "rock bottom" level, which translates to KOSPI 6,000 points. Kim projected that KOSPI will show gradual recovery after verifying whether Big Tech sales growth rates remain solid next week, rather than remaining at bottom levels for an extended period. The analyst added that profit-taking could emerge when the index surpasses the mid-8,000 level, as investors who purchased at peak levels remain in the market.
VKOSPI Volatility Driven by Supply-Demand Factors
Regarding the KOSPI 200 volatility index (VKOSPI) surging to 96.94 on June 29 (closing basis)—higher than levels during the 2008 financial crisis—Kim analyzed that supply-demand factors played a much larger role than fundamental factors. The researcher noted that financial authorities' rationale for additional restrictions on leverage products stems from this dynamic. When asked whether recent regulatory strengthening on single-stock leverage and inverse products could suppress volatility, Kim projected that volatility will decrease as the scale of LP (liquidity provider) purchases of underlying stocks and corresponding futures hedging shrinks due to reduced investor leverage product purchases.
Hyperscaler AI Infrastructure Investment Projected at $758 Billion
Kim Byung-yeon evaluated that capital expenditure reduction risks among hyperscalers remain limited despite recent global semiconductor adjustments, with low probability of investment cuts being announced in second-quarter earnings releases starting soon. The researcher projected that AI infrastructure capital expenditure by five hyperscalers (Microsoft, Meta, Alphabet, Amazon, Oracle) will reach $758 billion in 2026, representing an 82.3% year-over-year increase. Kim emphasized that while semiconductor daily average export growth rates will slow and converge toward zero next year, semiconductor export amounts themselves have jumped above $2 billion on a daily average basis—a fundamentally different level compared to the past range of $700-800 million.
Semiconductor Export Levels Structurally Elevated
Kim emphasized that KOSPI net profit recorded 217 trillion won last year, became a market earning 759 trillion won this year, and is scheduled to transform into a market earning 1,000 trillion won next year, questioning whether the market would return to 217 trillion won. Regarding SK Hynix's long-term agreement (LTA) application, Kim stated that while concerns emerged about potentially signing contracts at lower prices and fueling semiconductor peak-out worries, LTA will confirm stability for mid-to-long-term performance. The researcher projected that industries will divide into those that can beat current interest rates (financial and IT sectors) versus those that cannot (construction and retail sectors), intensifying polarization as the Federal Reserve maintains its rate-hold stance through year-end.
Foreign Selling Pressure Expected to Ease
Kim Byung-yeon projected that the large-scale net selling flow by foreigners weighing on the domestic stock market will subside. The researcher attributed this outlook to foreign ownership ratios in the KOSPI semiconductor sector declining to minimum levels, gradually alleviating net selling pressure. Kim stated that current negative factors closely resemble those experienced in March-April, noting similarities to concerns raised at that time regarding the Iran war and turbo-quant-triggered semiconductor peak-out debates, and emphasized the need to recall learning effects from that period. Regarding escalating military conflict between the United States and Iran, Kim projected that President Trump will "TACO" (Trump Always Caves Out) at a point closer to the U.S. midterm elections, similar to the March-April timeframe.
FAQ
What did Kim Byung-yeon say about the KOSPI floor level on July 20?
Kim Byung-yeon stated at a Korea Exchange press conference on July 20 that the KOSPI index is unlikely to fall below 6,000 points even when reflecting all currently discussed negative factors. He specified that a forward price-to-book ratio of 1.3x to 1.4x represents an appropriate floor level, equivalent to KOSPI 6,000 points.
Why did VKOSPI reach higher levels than the 2008 financial crisis?
Kim Byung-yeon analyzed that when VKOSPI reached 96.94 on June 29, supply-demand factors played a much larger role than fundamental factors. The researcher noted this dynamic explains why financial authorities introduced additional restrictions on leverage products, as investor leverage purchases triggered LP hedging activities that amplified volatility.
How much will hyperscalers invest in AI infrastructure in 2026?
Kim Byung-yeon projected that five hyperscalers (Microsoft, Meta, Alphabet, Amazon, Oracle) will invest $758 billion in AI infrastructure capital expenditure in 2026, representing an 82.3% year-over-year increase from the previous year.
