Foreign investors have net sold nearly $110 billion in Korean stocks this year, increasing pressure on retail investors to absorb the sell orders

Odaily Planet Daily reported that since the beginning of this year, foreign investors have withdrawn nearly $110 billion from the South Korean stock market, a record high, primarily to avoid imbalances in their portfolio allocations caused by the rapid rise of Korean stocks. This has forced domestic retail investors in South Korea to shoulder most of the buying pressure. Following purchases of 42.4 trillion won in June, Korean retail investors have net bought 13.2 trillion won worth of KOSPI stocks this month so far.

As of July 14, the outstanding balance of margin loans used by retail investors to invest in KOSPI stocks stood at 28 trillion won, after hitting a record high of 29.8 trillion won on June 24. According to

Alexander Redman, Chief Equity Strategist at CLSA, "South Korea remains the most overweight market in our portfolio, but I have already started reducing positions. What concerns me is that the market is currently dominated by retail investors, as they are heavily using margin trading." (Jinshi)