South Korean stock turnover plunges 70 per cent as foreign funds flee, Bloomberg reports
South Korean stock turnover has fallen 70 per cent from its May peak, with foreign investors withdrawing US$131 billion this year. Samsung Electronics foreign ownership hit 46.38 per cent, a low since 2008. The market's reliance on memory-chip giants has become a liability amid AI investment shifts.
South Korean stock turnover has plummeted 70 per cent from its peak in late May, with foreign investors withdrawing US$131 billion (HK$1.02 trillion) from the market this year, Bloomberg reported.
Data from the Korea Exchange, cited by Yonhap News Agency, show that as of 8 October, foreign ownership of market leader Samsung Electronics had fallen to 46.38 per cent — a low not seen since the 2008 global financial crisis.
The Korea Composite Stock Price Index, the world’s best-performing major equities benchmark in the first half, has since lost 22 per cent to become the worst in the second half, while its AI-heavy Taiwanese and US peers set new highs, according to Bloomberg.
The report noted that behind the reversal is a market whose AI fortunes hinge disproportionately on Samsung Electronics and SK Hynix, the two memory-chip giants at the heart of the global AI supply chain. That concentration is now a liability as investors question the durability of memory chips’ boom cycle, while the brutal leverage-driven sell-off in the summer has made some global funds hesitant to return.
Bloomberg said South Korea is now struggling to lure buyers, a problem amplified by the nearing completion of combined 55 trillion won (HK$320 billion) stock buybacks by Samsung and SK Hynix. Data from JPMorgan shows that buyback orders from these two giants accounted for the majority of market buy orders last month.
UBS Global Wealth Management Wu Chun-Lai also noted a preference for positioning in AI-related investment opportunities via Taiwanese stocks, citing the region's robust technology hardware ecosystem and the benefits derived from the strong spending plans of major technology companies.