The direction of Korea's stock market in the second half of this year will be driven by corporate earnings rather than interest rates, according to an analysis. Market experts hold the view that even if Korea and the United States raise their benchmark rates within the year, the market can overcome the rate burden as long as earnings provide support, making a KOSPI reading of 10,000 in the second half fully achievable. In the property market, they forecast that upward pressure on housing prices will continue in the second half, centered on the Seoul metropolitan area, driven by supply shortages and expanding real demand despite the government's series of regulations. Yeom Seung-hwan, a director at LS Securities, stressed at "Seoul Economic Daily Money Trend 2026," held Monday at Lotte Hotel in Jung-gu, Seoul, that "during a high-growth period like now, rate sensitivity declines." He added, "This is a time to focus on corporate earnings rather than interest rates. As long as earnings are good, the market can overcome the rate burden even if it exists." Yeom analyzed that, given the current KOSPI price-earnings ratio (PER) of 8.25 times, the fair value stands at around 10,700, and that the index will break through the "10,000" mark within the year after a sector-rotation pattern this month. In the property sector, Chae Sang-wook, CEO of Connected Ground, noted, "The stock market's super boom, which has continued since last year, is leading to an explosive increase in household purchasing power." He pointed out, "High-priced homes may face resistance due to tax uncertainty, but buying demand for mid- to low-priced apartments below 1.5 billion won will continue for the time being." He observed that the Hwaseong, Suwon and Yongin areas will emerge as new economic hubs on the back of the government's "Korea's Great Leap Three Mega Projects."...

Korea's exports surpassed $100 billion in June, raising expectations that the country could reach not only its original target of the world's fifth-largest exporter this year but the fourth-largest as well. According to cumulative export figures compiled by the World Trade Organization (WTO) for January through April, the only countries ahead of Korea are China, the United States, Germany and the Netherlands. During this period, the Netherlands' exports totaled $343.5 billion, about $40 billion ahead of Korea's $306.6 billion. But with Korea breaking records in both May and June, some analysts say a reversal is possible in the second half of the year. Supporting this analysis is the fact that non-chip exports reached a record $57.4 billion last month, or $2.55 billion per working day on average. In particular, the Netherlands sees roughly 40% of its export value come from "re-exports," leading some to note that Korea has, in real terms, already entered the global top four. This occurs because the Netherlands' Port of Rotterdam serves as an export hub for Germany and other landlocked Central European countries along the Rhine River. Still, there are considerable challenges hidden behind the $100 billion monthly export figure. The most immediate concern is that recent export growth is excessively dependent on the semiconductor industry cycle. Indeed, the share of semiconductors in total exports is rising by the day. According to the Korea International Trade Association, chip exports accounted for only 13% of export value in January 2023. This share broke into the 20% range for the first time in March 2024 (20.7%), then soared to 31.2% in January this year. It then reached 42.31% in May, marking the first time the semiconductor share entered the 40% range. Not only has the share of semiconductors in exports steadily risen, but the pace of the increase has also accelerated. Last month, chip exports amounted to $44.82 billion, accounting for 43.8% of total exports. Adding $5.41 billion in exports from the computer segment, which is linked to the semiconductor cycle, brings the share to 49.12%. A positive aspect for Korea's economy is that the semiconductor cycle is likely to remain in a boom for the time being. The government expects rising semiconductor demand and the resulting product price increases to continue at least through the second half of this year. "Demand for semiconductors is increasing not only in artificial intelligence (AI) data centers but also across IT product lines," an official at the Ministry of Trade, Industry and Energy said. "For now, the semiconductor industry trend is solid." The problem is that a high concentration in a specific item can reduce resilience. The Bank for International Settlements (BIS) recently warned that "the excessive speed and intensity of concentrated investment in AI raises concerns about sustainability and financial vulnerability." The DRAM export price per kilogram, which reflects the price of general-purpose DRAM, fell about $1,000 from the previous month to $60,000, turning to a decline for the first time in nine months. This suggests that the pace of future semiconductor price increases could moderate. The intensifying global protectionism is also a burden. As early as the first day of the month, the European Union (EU) implemented "new steel measures" that cut its tariff-free steel import quota to about half the previous level. With the United States facing midterm elections in November, the possibility remains that it could once again play the tariff card. Jang Sang-sik, head of the Institute for International Trade at the Korea International Trade Association, said, "Various measures to protect domestic industries are being implemented across global trade markets, not only in Europe but also in India and elsewhere. Problems such as the logistics congestion caused by the U.S.-Iran war also cannot be seen as fully resolved yet." Falling oil prices due to the end of the war are also expected to weigh on export performance. In the refining and petrochemical industries, export performance improved thanks to rising international product prices caused by the U.S.-Iran war. In fact, the growth rate of petrochemical exports remained negative throughout last year but turned positive in March this year, right after the war broke out. Petroleum products also surged 89.1% year-on-year in March and showed a growth rate close to 50% last month. Diversifying export items is another task Korea must address. "Exports of consumer goods such as instant noodles and cosmetics, as well as machinery, need to grow more than they do now, so that Korea can build stronger resilience against the semiconductor downturn cycle," an industry official said....