Goldman Sachs: AI Spending Boost Can’t Offset KOSPI 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 foreign buying of KOSPI stocks and Alphabet raising AI capital expenditure expectations, which bolstered the semiconductor demand narrative, the Korea Composite Stock Price Index still fell about 2% last week.

Goldman Sachs pointed out that foreign capital inflows were mainly concentrated in the tech sector, but the Korean market still faces medium-term capital outflow pressure, with foreign holdings of semiconductor stocks near historical lows. Meanwhile, the expected EPS for KOSPI over the next 12 months has been cut by 0.4%, with the automotive sector facing the most significant downward pressure on earnings expectations.

On the leverage front, retail investors' margin balances in South Korea have dropped from a peak of $25 billion to $22 billion, while leveraged ETF sizes have fallen from $53 billion to $26 billion. Goldman Sachs believes AI capital expenditure remains a key support for the Korean stock market, but downward revisions in earnings expectations, low foreign holdings, and volatility in risk appetite could continue to amplify short-term index fluctuations.