Key Issue Briefing
Hormuz Strait Crisis: Following U.S.-Israeli strikes on Iran, the Strait of Hormuz entered a wartime state, sending Brent crude futures surging 13% intraday to surpass $82 per barrel. Asian markets initially tumbled 1-2% but showed unexpected resilience. A clear flight to safe-haven assets including gold, the dollar, and the yen emerged.
KOSDAQ Active ETF Competition: Samsung Active Asset Management and Timefolio Asset Management will simultaneously launch active exchange-traded funds benchmarked to the full KOSDAQ index on the 10th of this month. The two products differ in total expense ratios at 50 basis points and 80 basis points respectively, with divergent strategies of concentrated investment versus core-satellite structure.
Hyundai Chemical Perpetual Bond Conversion: Four major banks—Hana, Shinhan, KB Kookmin, and Woori—agreed to acquire 605 billion won in hybrid securities (perpetual bonds) for the Daesan petrochemical facility integration project in South Chungcheong Province. The perpetual bond rate is being considered at around 5%, with plans to convert 1 trillion won in existing loans to perpetual bonds to accelerate restructuring.
Financial Product Investor News
1. Oil Surges 13% Intraday, Triggering Circuit Breaker; Asian Markets Shaken
Brent crude futures jumped 13% immediately after market open to surpass $82 per barrel following U.S.-Israeli strikes on Iran. This marked the largest single-day gain since Russia's invasion of Ukraine in March 2022. Circuit breakers were triggered on NYMEX as WTI futures also surged over 12%. Japan's Nikkei index fell as much as 2.7% intraday before closing down 1.35%. Gold prices exceeded $5,350 per troy ounce, reflecting clear safe-haven preference. Goldman Sachs warned that a complete Hormuz blockade lasting over one month could spike European and Asian spot gas prices by 130%, with European natural gas potentially exceeding 100 euros per megawatt-hour if the blockade extends beyond two months.
2. Four Civilian Ships Struck Amid Hormuz Blockade; Middle East Tensions Peak
Following Iran's Islamic Revolutionary Guard Corps blockade of the Strait of Hormuz, four civilian vessels including a Palau-flagged cargo ship and Marshall Islands-flagged tanker were attacked. The strait handles approximately 20% of global seaborne oil transport. According to the U.S. Energy Information Administration, 84% of crude oil and 83% of LNG passing through the strait in 2024 was destined for Asia. JP Morgan warned that a complete blockade could saturate Middle Eastern onshore storage facilities within 25 days, potentially forcing production cuts. Net energy importers including South Korea face direct impact, with NHK reporting Japan's GDP could decline approximately 3% in a worst-case scenario.
3. Samsung Active, Timefolio Compete in KOSDAQ Active ETFs
Samsung Active Asset Management and Timefolio Asset Management will simultaneously launch active ETFs benchmarked to the full KOSDAQ index on the 10th, while Hanwha Asset Management will introduce a KOSDAQ 150-based active ETF on the 17th. Total expense ratios are 50 basis points for Samsung Active's "KoAct KOSDAQ Active," 80 basis points for Timefolio's "TIME KOSDAQ Active," and 15 basis points for Hanwha's "PLUS KOSDAQ 150 Active." Samsung Active adopted a concentrated strategy focusing on seven growth industries including pharmaceuticals, biotech, semiconductor materials, and robotics with a 70:30 growth-to-value ratio. Timefolio differentiated with a core-satellite structure centered on existing large KOSDAQ sectors like biotech and secondary batteries while adding new growth theme stocks.
4. NPS Eyes India as Fifth Overseas Investment Hub
The National Pension Service is internally reviewing establishing an overseas office in India, with local investment activities potentially beginning next year. If established, it would become the fifth investment hub following New York, London, Singapore, and San Francisco, with Mumbai under strong consideration. As of late 2024, North America accounted for 70.5% and Europe 14% of NPS overseas equity investments. CIO Seo Won-ju plans to visit India this month. India has recorded annual growth rates exceeding 7%, with last fiscal year's growth projected at 7.4%.
5. Korea Investment & Securities Advances into China Research, IB Markets
Korea Investment & Securities signed a comprehensive MOU with Guotai Junan Securities, China's largest securities firm by equity capital, covering research, investment banking, and financial product distribution. The partnership includes research, brokerage, mutual product distribution, and IB cooperation. Guotai Junan, formed through the merger of Guotai Junan Securities and Haitong Securities, has total assets of 2 trillion yuan (approximately 395 trillion won) and equity capital of 338.9 billion yuan (approximately 67 trillion won) as of Q3 2025.
6. Four Major Banks to Acquire 600 Billion Won in Hyundai Chemical Perpetual Bonds at ~5% Rate
Four major banks agreed to acquire 605 billion won in perpetual bonds to support the "Daesan No. 1 Project." Allocations are: Hana Bank 201 billion won, Shinhan Bank 161 billion won, KB Kookmin Bank 149 billion won, and Woori Bank 94 billion won. Korea Development Bank and Export-Import Bank of Korea will also contribute 157 billion won and 151 billion won respectively. Plans call for converting 1 trillion won in existing loans to perpetual bonds at rates around 5%, higher than current loan rates. Creditors are also discussing step-up conditions and call options every 3-5 years.
