South Korea s2026-08-09 09:10:44Korean stock volatility falls to a two-month low as tighter rules cool leveraged tradingSouth Korea’s stock market may have passed its most violent phase of turmoil after a historic selloff, according to Bloomberg. The country’s equity volatility index fell to a two-month low last week from the record levels seen in June, while Morgan Stanley estimates that more than half of the deleveraging process has already run its course. The KOSPI had at one point dropped nearly 40% from its June peak, and global funds have sold more than $100 billion worth of Korean stocks this year. Market stress was severe enough that the Korea Exchange’s 20-minute trading curb was triggered four times in July, a record, with the mechanism kicking in after an 8% decline. Regulators later tightened rules on leveraged products, including higher cash margin requirements for single-stock leveraged ETFs starting July 31, which led to lower trading volume and assets in funds tied to Samsung Electronics and SK Hynix. Even with valuations at historic lows, foreign investors have not meaningfully returned, though Goldman Sachs kept its 12-month KOSPI target at 12,000.1830
KOSPI2026-07-30 02:04:07JPMorgan says Korea’s KOSPI may be entering a valuation rebound after deleveraging waveJPMorgan said in a July 29 note that much of the forced deleveraging behind South Korea’s sharp equity sell-off has already run its course, opening what it sees as a valuation recovery window for the KOSPI. The index has fallen nearly 40% from its June 22 high, while leveraged ETF assets have shrunk from $50 billion to $17 billion and hedge fund long-short exposure has dropped from 5.7x to 3.2x. According to the report, leveraged ETF liquidations are complete and hedge fund deleveraging is more than 90% finished. The bank argued that the main driver of the slump was forced unwinds rather than deteriorating fundamentals. It broke leverage into three buckets: leveraged ETFs, hedge funds, and retail margin financing. In JPMorgan’s view, retail financing was never the primary risk, with margin balances standing near $20 billion and representing a smaller share of market capitalization than at the start of the year. The note also said foreign outflows, which exceeded $110 billion this year, were heavily concentrated in two memory chip makers that are also major underlying holdings for leveraged ETFs. As their weights in the MSCI Emerging Markets Index fell, passive selling pressure eased. With the KOSPI now trading at 5x 12-month forward earnings, JPMorgan said current prices already reflect deep pessimism and highlighted four areas to watch after deleveraging: wealth-effect plays, biopharma, preferred shares, and banks.2150
South Korea s2026-07-22 21:40:14Foreign Investors Dump $75 Billion in South Korean Stocks as Domestic Buyers Scoop Up $69 BillionThe Kobeissi Letter said foreign investors have been net sellers of South Korean stocks every trading day for the past month, with year-to-date sales reaching $75 billion while domestic investors bought $69 billion.470
South Korea e2026-07-21 03:35:09JPMorgan Keeps Overweight Call on Korea as KOSPI Slides 28%, Holds 12-Month Target at 12,500JPMorgan said in a July 21 research note that South Korea’s KOSPI has fallen about 28% from its June 22 peak, with leverage in ETFs and equity hedge funds shrinking sharply, yet the bank is still keeping an overweight stance on the market and a 12-month target of 12,500 for the index. The bank framed the sell-off as a crowded-position unwind rather than a sudden collapse in fundamentals. It estimated that Korea-focused leveraged ETF assets had dropped from roughly $50 billion at the end of June to $26 billion, with about 75% of the unwind already completed. Equity hedge fund deleveraging has also passed 50%, while the long-short ratio has fallen from above 5.5x to below 4x. JPMorgan also said foreign investors have pulled more than $110 billion out of Korean equities this year, with about 90% of those outflows concentrated in Samsung Electronics and SK Hynix. At the same time, Korean regulators have moved to tighten rules around single-stock leveraged, inverse and covered call products, including higher deposit requirements and stricter margin rules. Even so, the bank said elevated volatility, tighter swap capacity and questions around the durability of AI-driven memory demand are still limiting how far any rebound can go.1400
JPMorgan2026-07-21 03:09:24JPMorgan Keeps Overweight Call on South Korea, Says Deleveraging Pressure Has EasedJPMorgan said in its latest Korea equity strategy report that the country’s market fundamentals remain intact, even after the sharp pullback in the KOSPI. The bank kept its overweight rating on South Korea and maintained a 12-month KOSPI target of 12,500. According to the report, the index has fallen about 28%-29% from its June 22 peak. JPMorgan said the selloff was initially driven by standard fundamental concerns and sector rotation, then intensified as higher volatility forced deleveraging across leveraged ETFs, equity long-short funds, and macro funds. The bank described the move as more of an unwind in crowded trades than a systemic reversal in the investment case for Korean assets. JPMorgan estimated that Korea-linked leveraged ETF assets dropped from roughly $50 billion at the peak to about $26 billion, implying deleveraging progress of around 75%. It also said equity long-short funds have completed more than half of their deleveraging, while the long-short ratio in the JPM Prime book fell from above 5.5x to below 4x. The bank added that retail leverage does not appear to pose a systemic risk, and said foreign outflows have been heavily concentrated in two memory leaders rather than reflecting a broad-based deterioration in fundamentals.1350
Bloomberg2026-07-13 01:20:16Bloomberg: Global funds’ selling of South Korean bonds climbs to a nearly three-month highGlobal funds have increased their selling of South Korean bonds to the highest level seen in nearly three months, according to Bloomberg. The shift in capital flows points to weaker risk appetite among overseas investors toward South Korea’s bond market. Bloomberg said the move shows foreign investors have turned more cautious, leaving the market under pressure from outward capital flows. The report focuses on the change in investor positioning and does not add further details beyond the scale of selling and the broader signal from cross-border flows. For the South Korean bond market, the key takeaway is that foreign outflows are now becoming a near-term pressure point as overseas demand softens.1370
South Korea s2026-07-07 04:59:27Korean Stocks Drop 8% as Foreign Investors Sell About $1.493 BillionSouth Korean equities fell sharply again, with the KOSPI plunging 8% intraday, while retail investors continued to buy into the weakness. According to the report, local retail traders posted net purchases of KRW 2.3179 trillion, or about $1.522 billion. Foreign investors, however, sold KRW 2.274 trillion worth of shares, equivalent to roughly $1.493 billion, adding pressure to the broader market. Institutional investors were also net sellers, offloading KRW 63.2 billion in stocks. Major technology names were hit hard, with SK Hynix and Samsung Electronics both down about 10%. The report cited Financial Post as the source for the fund flow data.1980
