Live Markets: Korean chip stock surge could help embattled European luxury
LIVE MARKETS-Korean chip stock surge could help embattled European luxury Adds blog post
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KOREAN CHIP STOCK SURGE COULD HELP EMBATTLED EUROPEAN LUXURY
Luxury brands have been hit hard by the war in the Gulf, with its knock-on effects on travel, but South Korea could offer some hope, thanks, perhaps unintuitively, to surging chip stocks.
South Korea, in 2025, accounted for around 10% of Moncler's MONC.MI 2025 sales, and around 9% of Prada's and 8% of sales at Hermès HRMS.PA and Burberry BRBY.L, according to UBS.
And those numbers could rise in 2026, with UBS pointing to strong like-for-like growth at Korean department stores, thanks partly to the chip stocks.
How? Well, first of all South Korea has high retail participation in its stock market and the KOSPI .KS11 is up close to 100% year to date, thanks to chipmakers. That's a lot of paper gains that could be realised and spent.
Then there are the large bonuses workers at Samsung and rival SK Hynix have been getting, even if the supersized payouts (of around $416,000 in Samsung) are limited to some workers in the memory chip division.
That's more money to spend, and more floating around the economy.
As well as that, UBS says, there's high inbound tourism from China, with some groups shunning Japan at the moment, and some Korean won weakness.
Let's see if we start seeing it in the numbers.
One last thing UBS flags is recent industry commentary suggesting "polarised trends with high-ticket items such as watches and jewellery, benefiting from the consumers strength the most, rather than all luxury goods such as soft luxury".
(Alun John)
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