JPMorgan says the correction in the Korean stock market may be orderly, remains optimistic about KOSPI2 bullish exposure

智通财经2026/10/06 00:56

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JPMorgan pointed out that, considering investors' positioning and profit growth, the correction in the South Korean stock market following the July AI/memory recovery could be more orderly than in previous AI rebound cycles. Analysts including Tony Lee wrote in a report that the current trend “appears more controlled rather than explosive,” citing an “improved gamma backdrop” that reduces the risks of mechanically magnified volatility and per-share earnings revision. Although Korean memory fundamentals have improved, they remain lagging behind after July's AI/memory recovery and still have room to catch up, particularly if macroeconomic factors such as high yields, oil prices, and risk appetite in Asian markets stabilize. South Korea's volatility environment improved in September, with dealers holding long gamma positions on equities totaling about $430 million, the largest gamma exposure in the past year. “Given the expensive pricing on the call option side, we believe it is most appropriate to hold KOSPI2 call exposure via structured products with rich convexity characteristics.” Ahead of Q3 earnings reports from Samsung and SK Hynix, analysts consider “HBM demand, pricing and product mix, exchange rates, as well as capex management and shareholder return updates as key catalysts, and the market could see significant volatility.”

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JPMorgan points out that, considering investor positioning and profit growth, the Korean stock market's retracement after the July AI/memory recovery may be more orderly than in previous AI rally cycles. Analysts including Tony Lee wrote in a report that the current trend “appears more controlled than explosive,” citing the “improved Gamma backdrop” as reducing mechanically amplified volatility and earnings per share revision risks. Although memory fundamentals in Korea have improved, the sector still lags behind following the July AI/memory recovery and there remains room to catch up, especially as macroeconomic factors such as high yields, oil prices, and declining risk appetite in Asian markets begin to stabilize. Korea's volatility environment improved in September, with traders holding around $430 million in long Gamma equity positions—the largest Gamma positioning in the past year. “Given the rich pricing on the call option side, we consider it most appropriate to hold KOSPI2 call exposure via structured products with abundant convexity features.” Ahead of third-quarter earnings for Samsung and SK hynix, analysts believe “HBM demand, pricing and product mix, exchange rates, as well as capital expenditure management and shareholder return updates are key catalysts, with the possibility of significant market swings.”

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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