07/05/2026

BIZ & FINANCE THURSDAY | MAY 7, 2026

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South Korea’s Kospi tops 7,000 for first time

Lynas CEO says US, Europe rules sway rare earth buyers away from China MELBOURNE: New government regulations in the US and Europe are helping to push customers to buy rare earth products from suppliers outside China, the chief executive of Australia’s Lynas Rare Earths said yesterday. China is the world’s largest and lowest-cost producer of the metals and magnets used in industries from automotive to defence, and for years has enjoyed a role as the world’s default supplier. But its restrictions on some exports last year, in response to US tariffs, left global automakers and other industries exposed. Since then, Washington has pledged to support higher prices for its leading rare earths producer to spur non-Chinese supply, but convincing international customers to pay more when cheaper Chinese options exist has proven difficult. The US is next year introducing new regulations guiding pro curement, which includes restrictions on the acquisition of certain magnets, tantalum and tungsten, while the European Union is bringing in restrictions over sourcing of those supplies, under its critical raw materials framework, Lynas CEO Amanda Lacaze said. “In both cases, we are observing changed purchasing decisions so that consumers can comply with the regulations,“ she said speaking at an event in Canberra. Perth-headquartered Lynas, which has a processing facility in Malaysia, is the world’s biggest producer of rare earths outside of China. Lacaze called for governments to be more interventionist to encourage a rare earths industry to flourish outside China, including for governments beyond the US and Japan to set floor prices. Australia is revising its policies around building a strategic reserve, which will“no doubt”have an element of a floor price, the country’s resources minister said in March, as the resources rich nation looks to cement its role as a key supplier to its allies. Meanwhile, French Trade Minister Nicolas Forissier said G7 trade ministers will discuss securing the critical minerals supply chain in their meeting this week. They will discuss rare earths, critical minerals and securing the supply chain so as not to be “hostage to certain countries that dominate the market”, Forissier told reporters before the meeting. They will also discuss industrial overcapacity and the WTO, Forissier said. The meeting comes ahead of the main G7 summit in mid-June and after an announcement by US President Donald Trump that he would raise tariffs on cars from the European Union to 25% from 15%. German Economy Minister Katherina Reiche said ahead of the meeting that she was in intensive talks with American officials over the tariffs. – Reuters

In the currency market, the won strengthened as much as 1.7% to 1,451.5 per dollar on the onshore settlement platform, hitting its strongest level since Feb 27. Broader market sentiment also improved after US President Donald Trump said he would briefly pause an operation to escort ships through the Strait of Hormuz, citing “great progress” toward a comprehensive agreement with Iran, sending oil prices sharply lower in Asian trading. Beyond tech, securities firms jumped 13.5% and financial groups rallied 4.2% yesterday on hopes that a stock market boom would lift earnings. They were in a minority of 200 gainers among the total 893 traded shares, while 679 declined. “South Korea’s stock market is still undervalued compared with historical valuations in terms of earnings per share, trading at about nine times this year’s earnings forecasts,” said Seo Sang-young, an analyst at Mirae Asset Securities. “If the demand for AI chips continues at this level, the Kospi could reach 10,000 points by the end of this year – but if the demand collapses with worries over inflation and weak growth due to the Iran war, it could plummet to as low as 4,500 points,” Seo said. The Kospi, which was trading in the 2,000 range when President Lee Jae Myung took office in early June 2025, breached 3,000 in less than a month, and powered through to top 6,000 in late February just before the Iran war broke out. “I believe the Kospi’s jump is due to the recovery of capital market confidence in South Korea, which had been undervalued,” Jung Cheong-rae, the leader of the ruling Democratic Party, said, crediting it to various government policies. Foreigners led yesterday’s rally with their biggest-ever daily purchase of local shares at 3.1 trillion won (RM8.4 billion). – Reuters

global rush into AI investment. The market was closed on Tuesday for a public holiday. So far this year, the Kospi has climbed 75%, after posting a 76% jump in 2025 – its best annual performance since 1999 – helped by the government’s push for market reforms. “Despite high oil prices and bond yields sparked by Iran war noises, foreign flow conditions are improving on a jump in the Philadelphia Semiconductor Index and AMD shares,” said Han Ji-young, an analyst at Kiwoom Securities. Shares of Advanced Micro Devices surged 12% in extended trading hours on Tuesday after it forecast second quarter revenue above market expectations, driven by robust demand for its data-centre chips as cloud-computing firms accelerate spending on AI infrastructure.

“sidecar” trading curb and rising as much as 7.06% to a record high of 7,426.60, as a blistering rally in US chip stocks overnight drove the Philadelphia Semiconductor Index up 4.2%. Samsung Electronics and SK Hynix leapt 14.4% and 10.6%, respectively, to all-time highs, together accounting for 44% of the Kospi’s total value. Samsung became only the second Asian company after Taiwan Semiconductor Manufacturing Co (TSMC) to crack the trillion-dollar club, and is among just four Asian firms valued at more than US$500 billion, along with TSMC, SK Hynix and Tencent . The broader gains built on a 5.1% rally on Monday, when domestic data showed robust manufacturing activity and trade was led by strong semiconductor demand amid a

o AI rally catapults Samsung into US$1 trillion club

SEOUL: South Korea’s benchmark Kospi index vaulted past 7,000 for the first time yesterday, as an AI powered rally in semiconductor stocks drove Samsung Electronics past the US$1 trillion market-cap barrier. The gains underscore how global demand for artificial intelligence hardware has become the dominant force reshaping equity markets, turning South Korea’s chip-heavy benchmark into one of the world’s best performing major markets. The Kospi closed up 6.45% at 7,384.56, after briefly tripping a rare

Currency dealers celebrate in front of a screen showing the KOSPI during a ceremony celebrating it breaking 7,000 points in a foreign exchange dealing room at the Hana Bank headquarters in Seoul yesterday. – AFPPIC

Berlin ponders plan to thwart Italian bid for Commerzbank FRANKFURT: As UniCredit prepares to take over Commerzbank, some members of Germany’s government are examining a drastic step to fend off the unwanted Italian bidder by taking a bigger stake in a lender Berlin considers strategic, people involved in the matter said. A potential KfW stake “should certainly be considered,“ said Armand Zorn, an influential member of the Social Democratic Party that now controls Germany’s Finance Ministry. “It should be viewed as a last resort if all other options fail ... The impact would go far beyond the symbolic,“ said the vice-chairman of the SPD’s faction in the German Bundestag. The government and of Germany’s financial centre,“ said Zorn. “Commerzbank plays a central role for the ... economic resilience of Germany.” As Germany tightens its belt financially, such a move would be difficult and it is unclear if the free-market, pro-business Christian Democrats, who govern Germany in an uneasy coalition with the more left-leaning SPD, would back it. further blow to Germany, which faces tariffs on trade with the US, the biggest buyer of German goods, from cars to machines. Compounding the acceleration of layoffs in Germany, China has turned from cheap producer to rival for some of its most prized industries. The acrimonious battle for

Germany already owns 12% of Commerzbank after a bailout during the financial crisis two decades ago and some in Berlin are considering whether it could use state bank KfW to increase the stake, potentially creating a large enough bloc to hinder a full takeover, two people with direct knowledge of the situation said on condition of anonymity. Although such a step would face several hurdles, not least the need to find several billion euros, it could be justified by Commerzbank’s role as a financier of the Mittelstand firms that form the backbone of Europe’s largest economy, they said.

ownership has reached a critical juncture after Orcel on Tuesday formally launched a takeover at a lowball price. Orcel argues that Commerzbank has not been living up to its potential and that Europe would benefit from bigger banks in a world of chaotic geopolitics. On Friday, Commerzbank will publish an updated strategy that its managers hope will convince investors of the value of its independence. The bank will announce cost cuts that will likely include plans to shave staff, two other people said, a third round of cuts this decade. – Reuters

Commerzbank’s management are growing exasperated as they fail to discourage UniCredit CEO Andrea Orcel’s €37 billion cross-border takeover attempt. Orcel has been pursuing Commerzbank since 2024, building up a nearly 30% stake in it as German Chancellor Friedrich Merz and the bank’s CEO Bettina Orlopp sounded the alarm. “The government should continue to signal that a hostile takeover of Commerzbank is not in the interests

Nonetheless, Commerzbank has become a test of the German government’s resolve, after its ministers and chancellor repeatedly warned UniCredit against pursuing a takeover. If it did nothing, it could further damage Berlin’s standing, after bickering ministers failed to deliver on promises of economic reform and Germany’s economy has ground to a virtual standstill. Losing Commerzbank would be a