Foreign net selling of Korean stocks this year approaches $110 billion, increasing pressure on retail investors to absorb the sell-off

According to Odaily, foreign investors have withdrawn nearly $110 billion from the South Korean stock market this year, setting a new historical record. The primary reason is to rebalance their portfolio allocations amid the rapid rise of South Korean stocks. This has led domestic retail investors to shoulder most of the buying pressure. Following their purchase of 42.4 trillion won in June, South Korean retail investors have already net purchased 13.2 trillion won worth of KOSPI stocks this month.

As of July 14, the margin balance used by retail investors for KOSPI stock investments stood at 28 trillion won, after hitting a record high of 29.8 trillion won on June 24. According to French

securities firm CLSA's chief equity strategist, Alexander Redman, "South Korea remains the most overweight market in our portfolio, but I have already begun reducing positions. What concerns me is that the market is currently dominated by retail investors, who are heavily utilizing margin trading." (Jinshi)