▲ 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]
■ Rush into bonds: Institutional investors' risk-on stance ended in September after five months, and money pulled from equities went into bonds rather than cash. Bond allocations excluding short-term Treasuries posted their largest monthly increase in more than five years, as higher government bond yields drew long-term investors back.
■ Market value wiped out: As the KOSPI slid from the 7,000 level to the 5,700 level, semiconductors — which had led the rally — dragged down group market capitalization on the way down. By contrast, KT&G (033780), HMM (011200) and Celltrion (068270), which benefited from dividend and earnings expectations, grew in size even in the falling market, leaving a sharp divide among groups.
■ Interest burden: The share of companies unable to cover even their interest costs with operating profit last year rose to a record high. Overall corporate profitability improved on the back of the semiconductor boom, but the ability of median companies to service interest weakened for a fourth straight year, laying bare the gap.
[News of Interest to Financial Product Investors]
1. Money Rushes into Bonds as Risk Appetite Shrinks
- Key summary: The State Street Risk Appetite Index fell into negative territory in September, its lowest level since the outbreak of the war with Iran in March. Institutional investors' risk-on stance also ended after five months. Bond allocations excluding short-term Treasuries rose nearly 1 percentage point, the largest monthly increase in more than five years. Meanwhile, allocations to emerging-market equities were trimmed amid macroeconomic uncertainty, and outflows continued from Korean stocks and Korean treasury bonds.
2. Greece Swings to Surplus While France Sinks into Deficit as 15 Years of Reform Split Fortunes
- Key summary: More than 15 years after the euro zone (countries using the euro) fiscal crisis of the early 2010s, the fiscal standing of major European countries has reversed. France's government debt ratio is projected at 119.3% this year and 121.7% next year, while Greece posted a fiscal surplus of 1.7% of gross domestic product (GDP) last year and Portugal 0.7%. France's 10-year government bond yield spiked to as high as 4.9877% in intraday trading on the 20th, while Greece stood at 4.248% and Portugal at 3.884% the same day. Analysts attribute the divide to southern Europe's severe austerity and structural reforms, while France has suspended implementation of its pension reform and already carries a high tax burden ratio.
- Key summary: As the KOSPI fell 18.11% from 7,003.74 on the 2nd of this month to 5,735.66 on the 21st, the combined market capitalization of 44 business groups shrank by 964.859 trillion won (19.40%). Of that, the combined decline at Samsung and SK amounted to 818.3604 trillion won, or 84.8% of the total net decrease. SK is smaller than Samsung, yet its decline was 105.5506 trillion won larger, with SK hynix (000660) alone shedding 399.5793 trillion won. Among the top groups, LG rose to third and Hanwha to fifth on smaller losses, while seven groups including KT&G, HMM and Celltrion expanded even in the falling market, helped by expectations for shareholder returns and earnings improvement.
[Reference News for Financial Product Investors]
4. Supermicro Guides Quarterly Revenue to 3.8 Times Year-Earlier Level on Surging AI Server Demand
- Key summary: Server maker Super Micro Computer guided first-quarter revenue for fiscal 2027 (July–September 2026) to $18.5 billion to $19.5 billion. That is up to $5 billion above its earlier estimate of $14.5 billion to $15.5 billion, and the $19 billion midpoint is about 3.8 times the $5.02 billion reported a year earlier. The company cited rising demand for artificial intelligence (AI) platforms, and raised its gross margin guidance to 12.0%–12.5% from 10.4%–10.8%. Anthropic, which is preparing an initial public offering (IPO), has also signaled investment of up to $750 billion to secure computing resources.
- Key summary: Investment preferences for retail government bonds held through retirement pension accounts diverged sharply by age group. The Seoul Economic Daily combined September subscription data for retirement pension accounts (DC and IRP) at two large brokerages. The 10-year bond drew 2,566 subscribers (35.6227 billion won allotted) and the 20-year bond 808 subscribers (9.7549 billion won). Investors in their 50s received 59.04% of the 10-year allotment and those 60 and older 20.71%, while those in their 40s accounted for 40.10% of subscribers to the 20-year bond. An official at one large brokerage said interest in long-term products with tax benefits is likely to grow as stock market volatility increases.
6. Rates Rising: Record 42.9% of Companies Cannot Cover Interest Costs
- Key summary: According to the Bank of Korea's annual corporate business analysis for 2025, released on the 21st, the share of companies with an interest coverage ratio (operating profit divided by interest expenses) below 100% was 42.9% last year, the highest since comparable data began in 2009. The share of companies with operating losses also rose to 34.4% from 33.9%. The operating profit margin for all companies improved to 5.2% from 4.6%. The interest coverage ratio for median companies, however, fell for a fourth straight year, to 194.0% last year from 356.6% in 2021. Lee Mi-joo, head of the Bank of Korea's corporate statistics team, said profitability indicators for small and medium-sized enterprises are also improving, so the upward trend in the share of vulnerable companies may not continue.
