Goldman Sachs: AI Spending Boost Can't Offset Korean Stock Selling Pressure, Leveraged ETF Size Halved from Peak

Odaily Planet Daily News: Goldman Sachs stated in its latest weekly report on the Korean market that despite recent consecutive foreign net buying of KOSPI and Alphabet's upward revision of AI capital expenditure expectations strengthening the semiconductor demand narrative, the Korea Composite Stock Price Index still fell by about 2% last week.

Goldman Sachs pointed out that the foreign capital回流 is mainly concentrated in the tech sector, but the Korean market still faces mid-term capital outflow pressure, with foreign holdings in the semiconductor sector near historical lows. Meanwhile, the expected EPS for KOSPI over the next 12 months has been revised down by 0.4%, with the auto sector facing the greatest downward pressure on earnings expectations.

In terms of capital leverage, the balance of margin loans for Korean retail investors has decreased from a peak of $25 billion to $22 billion, and the size of leveraged ETFs has dropped from $53 billion to $26 billion. Goldman Sachs believes that AI capital expenditure remains the main supporting factor for the Korean stock market, but downward revisions in earnings expectations, low foreign positions, and fluctuations in risk appetite may continue to amplify short-term index volatility.