Foreign Investors Sell Record $63.6 Billion of South Korean Stocks as Samsung, SK Hynix Reach 52% of KOSPI
Foreign investors have sold $63.6 billion of South Korean equities year-to-date, the largest annual outflow on record since 1999, even with seven months left in the year. Samsung Electronics and SK Hynix accounted for $58.6 billion of the selling as portfolio managers cut positions to meet diversification rules that limit single-stock exposure to 10% of fund assets after the two chipmakers grew to about 52% of the KOSPI.
The outflows add a new pressure point to a market already dominated by the two stocks and marked by rising leverage. South Korea this week launched 16 single-stock leveraged ETFs tied to Samsung and SK Hynix that drew about $2.8 billion on debut, while brokerage margin loans have climbed to roughly 34 trillion won to 36 trillion won; Goldman Sachs estimates diversification rules have driven about $69 billion of forced selling since late October, even as the National Pension Service said it would raise its domestic equity allocation target.
From the sources (7 posts)
@rtodiWas in Korea this week for business and learned from colleagues about this wild trend: young Koreans in their 20s and 30s are aggressively taking out loans, especially margin loans from brokerages and credit loans from banks to invest in th
@rtodi@jukan05 This upcycle has its branches where I cannot even fathom. Also, Resonates with what I heard this week.
@globalmktobserv🔴Leveraged trading in South Korean semiconductor stocks is SKYROCKETING: 16 single-stock leveraged ETFs tied to Samsung Electronics and SK Hynix launched this week, attracting combined assets of ~$2.8 billion on their first day of trading
@globalmktobserv‼️South Korea is the world's hottest stock market, but WARNING signs are building: The KOSPI has surged more than +250% over the last 18 months, driven almost entirely by Samsung and SK Hynix, which together account for more than 50% of th
@globalmktobserv⚠️Foreign investors are DUMPING more South Korean stocks than EVER: Foreign investors have SOLD -$63.6 billion in South Korean equities year-to-date, the largest annual outflow on record since 1999, with 7 months still remaining in the yea
@globalmktobserv🚨South Korea's stock market is INSANELY concentrated: Samsung Electronics and SK Hynix together account for ~52% of the entire KOSPI index, with Samsung at 27% and SK Hynix at 25%. Adding Samsung Electro-Mechanics, a chip components maker
@globalmktobserv🚨The global single-stock leveraged ETF market is EXPLODING: Global leveraged and inverse single-stock ETF assets under management (AUM) surged to ~$65 billion, more than DOUBLING since the beginning of April. The US accounts for ~$46 bill