[Edaily Reporter Kwon Oh Seok ] The Wall Street Journal (WSJ) pointed out that the phenomenon of American Depositary Receipts (ADRs) for SK hynix(000660) trading at prices up to 50% higher than their underlying Korean shares is a “sign of overheating in AI investment.”

James Macintosh, a senior columnist for The Wall Street Journal, stated in a column on the 26th (local time), “Such a large ADR premium is unlikely to occur in a normal market.” Since its listing on the New York Stock Exchange on the 10th of this month, SK hynix’s ADRs have traded at prices 16–51% higher than the underlying shares.
This disparity is attributed to limited ADR supply and restrictions on arbitrage trading due to regulations. While it is possible to convert Korean stocks into ADRs, the reverse conversion is practically impossible, making it difficult to bridge the price gap.
McIntosh pointed out that even when factoring in transaction costs, exchange rates, and taxes, the current premium is excessive, noting that demand for U.S. semiconductor stocks has spiraled out of control due to the investment frenzy surrounding AI-related stocks. He warned, “If semiconductor stocks plummet in both South Korea and the U.S., causing the premium to disappear, the impact would be far more severe.”
Here are the key news stories to watch before the market opens on the 27th.
◇Israeli Prime Minister: “Conditions for Ending the War? Iran Must Realize It Must Abandon Its Nuclear Program”
- Israeli Prime Minister Benjamin Netanyahu said in an interview with Fox News on the 26th (local time) regarding the conditions for ending the war with Iran, “The regime must either change, or it must be weakened enough to realize on its own that it must halt its nuclear program and change course.” He added, “This is exactly what President Donald Trump is trying to achieve, and I fully support his efforts.”
The Israeli leader’s remarks are interpreted as implying that Iran’s theocratic regime must be overthrown or its military capabilities must be devastated through even more intense attacks. Prime Minister Netanyahu emphasized, “If he (Trump) can do it—if he can do it without a fierce military conflict—then that’s fine.”
◇ Chinese AI Firm DeepSeek Decides to Halt Investor Recruitment… Here’s Why
-According to Bloomberg and other sources, Chinese artificial intelligence (AI) company DeepSeek has abruptly halted its investor recruitment process. Sources say DeepSeek, which recently launched its second round of fundraising, verbally informed some investors that it would suspend contract procedures for the time being. However, the background behind DeepSeek’s decision remains unclear. DeepSeek had launched its second round of fundraising this month, following its first round in May, which raised 50 billion yuan (approximately 11 trillion won).
Bloomberg analyzed that the leak of remarks made by DeepSeek founder and Chairman Liang Yuanfeng during an investor meeting played a role in this decision. In the recording, Chairman Liang stated, “China’s AI technology development has temporarily stalled due to a shortage of computing resources (resulting from U.S. technology sanctions),” acknowledging the company’s continued reliance on NVIDIA AI chips. He also mentioned that we will likely see these chips replaced by Chinese-made AI chips within a year.
◇RIA Accounts: Capital Gains Tax Deduction Based on Sale Settlement Date
- On the 26th, the Financial Supervisory Service issued a consumer advisory regarding Return to Domestic Market (RIA) accounts. When selling foreign stocks through an RIA account, the capital gains tax deduction rate is determined based on the date of settlement. To qualify for tax benefits, investors must invest the proceeds in domestic stocks and hold them for one year. Individual investors can claim a capital gains tax deduction on foreign stocks if they sell foreign stocks acquired by December 23 of last year through an RIA account and invest the proceeds in domestic stocks for one year.
The capital gains tax deduction rate for sold foreign stocks will be gradually reduced to 80% by the end of July this year and to 50% by the end of December. Note that the deduction rate is determined based on the date the sale settlement is completed, not the date the foreign stock sale order is executed (T-day). Furthermore, RIA accounts were introduced to stimulate the domestic capital market, and tax benefits are granted only when funds from an RIA account are invested in domestic stocks for at least one year.
◇ Incentives for Civil Servants Practicing Proactive Administration, Including “Abolition of the Upper Limit on Rewards for Reporting Stock Price Manipulation”
- The Financial Services Commission announced that it has selected eight civil servants as outstanding performers in proactive administration for the first half of this year, awarding them certificates of merit and granting incentives such as the highest performance bonus rating. Notable examples include “Reform of the Capital Market Unfair Trading Reporting Reward System” (Administrative Officer Kim Min-soo), which abolished the cap on rewards for reporting stock price manipulation, and “Measures to Strengthen Management of Overdue Individual Debts in the Financial Sector” (Administrative Officer Lee So-min), which curbed the occurrence of long-term delinquent debts.
Also included are “System for Suspending Transactions in Accounts Suspected of Being Used for New Types of Phishing” (Administrative Officer Nam Go-woon), which prevented damage from phishing crimes such as romance scams; “Transition to a Licensing System for Purchased Debt Collection Businesses” (Administrative Officer Jang Hee-jin); “Establishment of a Joint Financial Sector Support System for Naphtha Supply and Demand Amid the Middle East Situation” (Administrative Officer Lee Jeong-min); and “Revitalization of Medium-Interest Loans” (Administrative Officer Jeong Hyeong-jun).
◇August Manufacturing Outlook: Expected to Fall Below the Benchmark for the First Time in Three Months
- The Korea Institute for Industrial Economics and Trade forecasts that the domestic manufacturing sector will slow down next month. According to the Industrial Business Conditions Expert Survey Index (PSI) released on the 26th, the PSI for the August manufacturing business outlook stood at 95. This marks the first time in three months that the PSI has fallen below the benchmark of 100. With 100 as the benchmark, a PSI above 100 indicates that most respondents expect business conditions to improve compared to the previous month, while a PSI below 100 suggests they expect a deterioration.
However, the PSI for the August export outlook stood at 111, exceeding the benchmark. By specific sector, most sectors—with the exception of semiconductors (156)—were found to be below the benchmark, suggesting that the perceived slowdown in the domestic manufacturing sector as a whole is expected to continue. In particular, the decline was notable in sectors such as home appliances (71), automobiles (83), machinery (100), and steel (67).