Foreign investors have withdrawn roughly $110bn from the South Korean equity
market YTD, a record, largely to avoid allocation imbalance after the market’s
rapid rally, leaving domestic retail investors to absorb most buying. After net
buying 42.4 trn KRW in June, retail investors have net purchased 13.2 trn KRW of
KOSPI stocks so far this month. Margin financing for KOSPI stocks was 280 trn
KRW as of July 14, down from a record 298 trn KRW on June 24. Lyon Securities
chief equity strategist Alexander Redman said Korea remains the firm’s largest
overweight but the firm has begun trimming positions; he flagged concern the
The market is increasingly retail-driven with heavy use of margin.
