Insights 
VT 
The South Korean S&P Global Manufacturing Purchasing Managers’ Index (PMI) stands unchanged at 49.4 in November. This suggests a continued contraction in the manufacturing sector, as the number remains below the neutral 50 mark.
The unchanged PMI reflects ongoing economic challenges within the manufacturing industry. It indicates persistent pressures from lower demand and output.
South Korean Manufacturing Sector
The unchanged South Korean manufacturing PMI at 49.4 for November confirms the sector’s persistent weakness. For us, this suggests continued downward pressure on the South Korean Won against the US dollar. In the coming weeks, we should consider buying USD/KRW call options to profit from potential currency depreciation.
This stagnant manufacturing activity will likely weigh on the KOSPI index, which is heavily influenced by large export-oriented companies. We see this as an opportunity to purchase KOSPI put options or establish bearish spreads to hedge against a potential market dip. Recent data from the third quarter of 2025 showed global semiconductor sales grew by a disappointing 1.5%, reinforcing concerns for Korea’s top export sector.
Given the uncertainty, an increase in market volatility is a distinct possibility. The Bank of Korea held its policy rate steady in its last meeting in November 2025, citing weak external demand, which does little to inspire confidence. This reinforces the case for positioning for a potential rise in the VKOSPI, the market’s volatility index.
Market Volatility and Economic Indicators
This environment is becoming reminiscent of the prolonged export slump we witnessed back in 2023, which kept a lid on equity market performance for several quarters. That historical pattern suggests we should remain cautious about any near-term recovery. The USD/KRW exchange rate has already been testing the 1,415 level, and this data provides little reason to expect that pressure to ease.
