▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.
[Key Issue Briefing]
■ Delisting rules blocked: A court has ruled that the Korea Exchange's rules on delisting companies that fall short of minimum market capitalization are invalid, leaving the financial authorities' policy of pushing out troubled companies effectively back at square one. With injunction requests piling up from marginal companies facing removal under the same standard, observers expect the broader overhaul of the KOSDAQ market to be set back.
■ China bolts the oil door: Global oil prices jumped across the board after China, which has the world's largest refining capacity, halted exports of petroleum products to countries including the United States starting this month. Coming on top of refining disruptions in Russia and the Middle East, the move is seen as China raising pressure on Washington by using energy dominance as leverage.
■ Shift into U.S. bonds: As U.S. Treasury yields have surged past 5%, Korean investors are moving money out of U.S. stocks and into bonds. In September, net purchases of U.S. bonds exceeded net purchases of U.S. stocks, which analysts read as a sign that bonds now look relatively more attractive than equities.
[News of Interest to Global Investors]
1. Marginal Firms Line Up Legal Challenges — Is KOSDAQ Reform Back at Square One?
- Key points: The 51st civil division of the Seoul Southern District Court held that market capitalization is driven by factors beyond a company's control, such as economic shocks and investment fund flows, and that companies falling short of the threshold must therefore be guaranteed the chance to file objections and have their cases reviewed by the exchange's corporate review committee. The court said a process for companies to make their case was necessary given that the KOSDAQ threshold had been raised from 4 billion won to between 20 billion and 30 billion won, and that moving up the effective date to July 2026 from the previously announced January 2027 had damaged corporate trust and predictability. Following the rulings, Eutilex and Daejin Advanced Materials filed for injunctions in July, followed by Kmpharmaceutical and Jeil M&S, while Medicox and Fintel also took action on the 1st of this month. The financial authorities have offered a stopgap measure delaying application of the 30 billion won threshold by six months to July next year, but observers say the framework itself needs to be reworked.
2. Trump Wants More, but China Halts Petroleum Product Exports
- Full article: https://www.sedaily.com/article/20097721
- Key points: Reuters reported that state-run refiner PetroChina canceled a substantial portion of gasoline and jet fuel shipments scheduled for October, and that large private refiner Zhejiang Petroleum & Chemical (ZPC) set no shipment schedules during the holiday period. Chinese authorities plan to review inventory levels and refinery utilization rates after the National Day holiday ends on the 7th of this month before deciding whether to resume exports. Singapore gasoline prices, the Asian market benchmark, rose 7.4% and diesel prices gained 3.1%, with supply strains deepening as Russian export restrictions and shrinking refining capacity among Middle Eastern producers compounded the shortfall. With U.S. refinery utilization running hot at 97%, President Donald Trump considered banning exports of domestically produced diesel but backed off after pushback from the refining industry, and is now pressing Europe to release diesel from reserves.
3. Korean Retail Investors Pile Into U.S. Bonds, Buying More Than Stocks
- Key points: According to the Korea Securities Depository, Korean investors made net purchases of $1.363 billion (about 1.841 trillion won) in U.S. bonds last month, bringing the two-month total including August to $3.184 billion (about 4.3047 trillion won). Net purchases of U.S. stocks in September came to $1.001 billion (about 1.353 trillion won), or $362 million (about 489.2 billion won) less than bonds. Settlement volume for U.S. stocks fell 49.9% to $32.85 billion in September from $65.63 billion in June, while custody balances of U.S. bonds rose 16.0% over three months to $15.72 billion at the end of September from $13.55 billion at the end of June. With the yield on the 10-year U.S. Treasury note climbing to around 5.3% and the 30-year yield topping 5.6% to reach its highest level in 24 years, Kang Jin-hyuk, a researcher at Shinhan Securities, said that in an environment where high rates are not quickly unwound, differences in fundamentals between sectors may matter more than the overall direction of the market.
4. Fierce Race to Lock Up AI Infrastructure: Deals Rush to Close 'Before Rates Jump' [Signal]
- Key points: According to the Signal league table compiled by Seoul Economic Daily, cumulative domestic merger and acquisition deal value for transactions completed through the third quarter of this year reached 62.053 trillion won, surpassing last year's full-year total of 61.3989 trillion won in just nine months. With trillion-won megadeals continuing as buyers rush to secure core assets such as AI data centers, SK Telecom announced plans to raise 3.08 trillion won from investors including Kohlberg Kravis Roberts (KKR) after spinning off and establishing SK Horizon, while Samsung Biologics agreed to acquire peptide contract development and manufacturing organization PolyPeptide Group for about 2.7 trillion won. As acquisition financing rates have climbed to around 7% on a senior debt basis, the push to close deals ahead of rising borrowing costs and tighter lending terms has become pronounced. In the advisory market, Deloitte Anjin took the top spot in financial advisory with 2.0442 trillion won, while in legal advisory Kim & Chang extended its dominance with 28 deals worth 8.6772 trillion won for a 46.97% market share.
▶Full article: Mortgages Above 5% Rise by 2.3 Trillion Won — The Shadow of Fighting Inflation With Rate Hikes
▶Full article: HD Hyundai Heavy Industries Union Rejects Tentative Wage Deal, With 52% Voting Against
▶Full article: September Consumer Inflation Returns to 2% Range; Core Inflation Rises 2.8%, Highest This Year
