On October 13, influenced by the sharp decline in the stock prices of Samsung and SK Hynix, South Korea's benchmark index briefly fell below 6000 points. Analysts warned that the ongoing outflow of foreign capital poses greater risks. Eugene Investment & Securities analyst Huh Jae-hwan stated that the scale of outflow is too large to be attributed solely to portfolio rebalancing after the rise, and domestic investors in South Korea need to absorb this selling pressure. However, this may be difficult, as retail investors remain cautious after the drop in July, and institutions like the National Pension Service have limited capacity to increase their holdings. Yuanta Securities analyst Lee Jae-won noted that the flow of foreign capital is now more concerning than semiconductor profits. He remarked, 'Samsung Electronics' third-quarter operating profit exceeded market expectations, and memory prices and AI infrastructure investments remain strong. However, the continued foreign selling is dragging down the performance of the KOSPI index relative to other markets.'
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Analyst: This is More Worrisome than Semiconductor Fundamentals
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JPMorgan and Goldman Sachs Reduce Exposure to $5 Billion AI Loan for Volta, Underwriting Only $1.3 Billion
On October 13, Bloomberg reported that JPMorgan and Goldman Sachs implemented unusual risk control measures while leading a $5 billion loan sale for AI cloud startup Volta Infrastructure Holdings: the two banks are underwriting only $1.3 billion of the term loan, leaving approximately $3.7 billion in chip-related loans ununderwritten to reduce their exposure. Sources indicate that this move aims to mitigate the risk of investors demanding higher returns on high-risk AI debt and the risk of banks being forced to hold unsold loans. The debt is priced at a yield of about 11%, which is among the higher levels seen for AI financing in the leveraged loan market, and the transaction is unrated, making it difficult for collateralized loan obligations (CLOs), the largest buyers of such debt, to participate. Banks typically underwrite the entire debt package to assure borrowers of funding, but following the losses from unsold loans due to the sharp interest rate increases in 2022, they are becoming more cautious about unproven AI financing structures. The deadline for loan subscription commitments is October 14; JPMorgan had previously begun gauging investor interest in August. -
Hong Kong Securities and Futures Commission Takes Action Against Groups Suspected of IPO Manipulation and Suspends Trading of Cha Bai Dao Shares
The Hong Kong Securities and Futures Commission (SFC) announced that it has taken action against two groups for their alleged involvement in a fraudulent scheme aimed at creating a false or misleading appearance of demand for shares in an initial public offering (IPO). The SFC has also instructed the Hong Kong Stock Exchange to suspend trading of Cha Bai Dao (02555.HK) shares starting from 9:00 AM today. The SFC is highly concerned that the IPO of Cha Bai Dao may have been artificially manipulated to create a misleading appearance of demand for its shares. During the ongoing investigation by the SFC, the suspension of trading in Cha Bai Dao shares is deemed necessary and appropriate to maintain an orderly and fair market for the stock and to protect the interests of investors. -
S&P 500 Futures Erase Losses, Remain Steady
On October 13, Dow Jones futures rose by 0.54%, S&P 500 futures increased by 0.02%, while Nasdaq 100 futures fell by 0.38%. -
Bank of Japan Reportedly Prefers Not to Implement Consecutive Rate Hikes in October
On October 13, sources revealed that officials at the Bank of Japan are inclined not to implement a rare consecutive rate hike this month, while still keeping the possibility of raising rates as early as December open. With no signs indicating a sudden increase in inflationary risks, Bank of Japan officials believe there is no need for consecutive rate hikes. The central bank will carefully assess economic data to evaluate whether a new round of rate hikes can be initiated at the December meeting. Sources also indicated that the final policy decision for the meeting on October 30 remains uncertain until the last moment. To manage inflationary risks, Bank of Japan Governor Kazuo Ueda's policy committee raised the interest rate to 1.25% last month. This followed pressure from U.S. Treasury Secretary Scott Pelley, who urged Japan to continue normalizing its policies to support a stronger yen. -
Bank of America Survey: Investor Allocation to Tech Stocks Reaches Highest Level Since 2020, Semiconductor Stocks Become Most Crowded Trade
A survey by Bank of America reveals that global investors are chasing the stock market rally driven by artificial intelligence, with allocations to tech stocks reaching the highest level since the market rebound following the COVID-19 pandemic. The survey shows that the proportion of fund managers overweight in tech stocks rose from 30% last month to 37%, the highest since August 2020. About 45% of respondents believe an AI bubble will emerge by 2027, while 42% do not. Artificial intelligence has been the hottest trading theme in the stock market, propelling the S&P 500 index to nearly a 120% increase during a four-year bull market. However, as investors question whether AI investment returns can justify massive tech spending, some enthusiasm around AI is waning. Respondents in Bank of America's October survey indicated that global semiconductor stocks are currently the most crowded trade in the market. (Bloomberg) -
Waller: Trump's Threat to Federal Reserve Independence Has Not Succeeded So Far
On October 13, Federal Reserve Governor Waller stated that Trump's threat to the independence of the Federal Reserve has not succeeded so far. He expressed confidence that Congress and the courts will protect the Federal Reserve's independence. -
Morgan Stanley: Storage Stocks Often Seem Cheapest Yet Most Risky at Cycle Peaks
On October 13, a report from Morgan Stanley indicated that the AI-driven storage chip supercycle continues, but the investment logic for storage stocks is changing: while tight supply and demand, price increases, and profit improvements still provide support, the significant rise in stock prices and concentrated upward revisions of earnings expectations have fully priced in optimistic forecasts, limiting further upside potential. The report states that the core contradiction is that the stronger the fundamentals, the more the risks at the cycle peak are likely to be underestimated—storage stocks often peak before profits reach their zenith, as the market tends to extrapolate current high profits, making valuations appear cheapest when the market is at its highest. Since the start of this cycle in September 2025, Asian storage stocks have risen approximately ninefold, with a market capitalization exceeding one trillion dollars, and the average consensus earnings per share for Asian storage companies has been revised up by 432%. Samsung and SK Hynix have forward price-to-earnings ratios of about 3 to 4 times, which may seem cheap but could be a valuation trap near profit peaks; to support implied price space, DRAM contract prices need to increase by about 70% month-on-month. Historically, in 2008 and 2012, storage stocks peaked about four months ahead of profit peaks, and in 2018 this extended to eight months. The report suggests that the turning point may come later, but caution is still needed regarding changes in supply and demand dynamics after 2027. -
U.S. Optical Communication Stocks Drop Again Pre-Market, Mavenir Falls Over 2%
On October 13, continuing yesterday's downward trend, U.S. optical communication stocks collectively declined again in pre-market trading. Among them, Mavenir Technologies, Credo, and MaxLinear fell over 2%, while Ciena, Astera Labs, Coherent, Broadcom, and Corning dropped over 1%. -
OpenAI: Investigating Performance Decline in GPT-6.1
OpenAI is currently investigating the performance decline issue in GPT-6.1. -
U.S. Pre-Market: Storage Chip Stocks Decline, SK Hynix Falls About 5%
On October 13, in the U.S. pre-market, storage chip stocks broadly declined, with SK Hynix falling about 5%, Western Digital down about 4%, SanDisk down about 4%, Micron Technology down about 3%, and Seagate Technology down about 3%.
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