'The crash is over': Expert sees Kospi rebounding from August, says Samsung Electronics far from peak

As the Kospi plunged from the 9,300 level to around 6,600 within a month, Yeom Seung-hwan, executive director at LS Securities, said the worst of the selloff is over and offered a positive outlook for the stock market in August.

Appearing on the YouTube channel "Jisikhangsang" on Thursday, Yeom said the margin balance had fallen from 38 trillion won ($26.8 billion) to 27 trillion won — a drop of 11 trillion won — over the past month. He explained that leveraged positions had been forcibly liquidated through margin calls, draining what he called the market's "urgent selling pressure."

"All that debt got wiped out, so the urgent supply is gone," he said. "The market has lightened up, and there is little chance of more margin-related selling from here. That's why I don't think it will fall further."

Yeom attributed the sharp decline to heavy concentration in Samsung Electronics and SK Hynix. The two stocks account for 55 percent of the Kospi, he noted, making their impact far more severe than that of US chipmaker Micron, which represents only 4 to 5 percent of its index.

Compounding the problem, 13 trillion won flooded into single-stock leveraged exchange-traded funds within a month of their launch, pushing concentration to an extreme. "Thirteen trillion won got sucked into single-stock leveraged ETFs within a month of their introduction," Yeom said. "People sold everything else, and the market got completely twisted." When forced liquidations piled on top of that, the index could not hold.

Yeom dismissed concerns that the semiconductor cycle has peaked, saying there is no basis for such fears. "Looking at Samsung Electronics' earnings guidance, supply will still be short in 2028," he said. "That means we are still a long way from the peak."

He also cited comments by Tesla CEO Elon Musk. "Musk said memory chips are in desperately short supply — that he has never seen an industry like this," Yeom said. "Supply grows 20 percent a year, but demand grows 200 percent. Demand is 10 times supply."

He drew a contrast with past semiconductor cycles. "In past cycles, demand would run out within two years — even the iPhone upgrade cycle wraps up in two years," he said. "But this time is different. AI data center demand is not peaking; centers keep getting built one by one."

On the supply side, he said factories in Yongin and Pyeongtaek are set to be completed in the first and second halves of next year, but will require about a year of setup after completion. "The point at which supply meaningfully increases is 2028," he said.

On investment strategy, Yeom advised investors who had borrowed heavily to use any rebound to unwind their positions. "If you took on debt and are in a rush, you should use this bounce to get out," he said. "Money earmarked for a wedding or an apartment down payment should absolutely not be in the market."

For those investing with discretionary funds or through regular installment plans, however, he said the situation is not a concern — and may even be an opportunity. "If you are investing with spare money or on a regular schedule, this has nothing to do with you. If anything, the crash lets you buy more, which is better," he said. He singled out sectors he would consider trimming: industries he expects AI to erode, and stocks tied to movie theaters, which he described as struggling against broader trends.

Looking ahead, Yeom flagged Nvidia's earnings release and the Jackson Hole symposium later this month as key variables. He added that clear signals from the Federal Reserve may be hard to come by, noting that the new Fed chair has given no hints. "He just says, 'I'll go by the data,'" Yeom said.