October exports were the second-highest on record, yet the KOSPI fell 16% in a month. Companies are making plenty of money, so why are share prices moving the other way?
2026-11-02
Two illusions hidden in the export figures
October exports of $115.28 billion (+93.7%) are clearly strong, but the growth rate itself is inflated. Last year the Chuseok holiday fell in October, while this year it moved to September, creating a difference in working days. In their September outlook, brokerages already noted that "with Chuseok, which fell in October last year, falling in September this year," the chip boom would be partly offset (Financial News, 2026-09). Indeed, the comparison base, October 2025 exports, was $59.57 billion; the total was small because of the holiday, but average daily exports of $2.98 billion were a record at the time (YTN, 2025-11-01). In other words, much of the +93.7% reflects a low base and more working days.
The second illusion is that the stock market buys "how much more earnings will grow" rather than "how much companies earn now." Share prices price in the point at which growth starts to slow before they price in export values. From November, once the base effect fades, the growth rate will inevitably slow, and foreign investors can be seen as selling that slowdown in advance.
What history shows: "the lag between peak exports and peak share prices"
Cases where share prices peaked first while memory conditions were still strong have repeated.
| Period | Chip exports | Share prices |
|---|---|---|
| 2017-2018 | Rose through 2H 2018 | Samsung Electronics peaked in November 2017, SK Hynix in mid-2018 |
| 2021-2022 | Rose through 1H 2022 | Samsung Electronics peaked in January 2021 |
Both times, share prices peaked 6-12 months before export figures hit record highs. Foreign investors are seeing the same picture now. Foreign net selling this year is a record of about 190 trillion won, 84% of it concentrated in Samsung Electronics and SK Hynix (MTN, 2026-07). Rather than buying on strong exports, they sold on doubts about "can it get any better than this."
So will it peak the same way this time?
There are differences too. Past cycle peaks in share prices came when rising inventories and falling prices appeared together. This time SK Hynix's inventory-to-sales ratio is 18%, the lowest since 2010, and price signals have not turned, with NAND prices up about fivefold in a year. The 2026 operating profit forecast for 335 major listed Korean companies also rose 58% in three months, from 519.7 trillion won to 818.8 trillion won (citing Yonhap Infomax, MTN, 2026-10-15). With earnings estimates rising and share prices falling, price-to-earnings ratios (PER) have actually come down sharply.
Ultimately, October's decline is better seen not as "because conditions worsened" but as the combination of doubts that deteriorating cash flow at US AI companies could cut memory demand and the fact that the easiest market in which to express those doubts is highly liquid Korean chip stocks. Kim Jae-seung of Hyundai Motor Securities put it this way:
"As the market digests events from late-October earnings and the early-November US midterms to Anthropic's listing in mid-November, foreign net buying is expected to gradually return" — Kim Jae-seung, Hyundai Motor Securities (MTN, 2026-10-15)
How should I view my Korea ETF?
Based on signals, it is not yet time to enter. Here are the last five trading days for EWY.
| Date | Close | 10-day MA | 50-day MA | 150-day MA | Entry allowed | Trailing stop room | From high |
|---|---|---|---|---|---|---|---|
| 10/26 | 152.72 | 155.35 | 176.76 | 173.08 | No | -10.86% | -30.86% |
| 10/27 | 157.46 | 154.44 | 176.20 | 173.27 | No | -8.72% | -28.72% |
| 10/28 | 165.91 | 155.05 | 176.12 | 173.53 | No | -4.89% | -24.89% |
| 10/29 | 161.83 | 155.61 | 175.87 | 173.80 | No | -6.74% | -26.74% |
| 10/30 | 152.89 | 155.86 | 175.36 | 174.02 | No | -10.78% | -30.78% |
Even with the 10/28 rebound, it never cleared the 50-day or 150-day line, and the -5.52% on 10/30 sent it back below the 10-day line. A drawdown in the -30% range from the high is a deep correction, but there is still no signal that the trend has turned.
From an investor's standpoint, the takeaways are:
- Don't chase on excitement over export growth figures. Once the base effect fades from November, headline growth will slow, and the market may read that as a "slowdown"
- The indicators to check are average daily exports and memory prices. As long as average daily exports, stripped of working-day effects, keep rising and NAND and DRAM contract prices climb, the case for a cycle peak is weak
- Approach in installments. Building positions gradually after confirming EWY reclaims its 10-day line and foreign net buying persists for several days is safer than trying to call the bottom
Detailed charts and signals for other tickers are available on the /signals dashboard.