Samsung and SK Hynix surge triggers fund position limit mechanism; Goldman Sachs warns that passive selling pressure may still persist afterward

Deep Tide TechFlow News, May 30th, according to Bloomberg, as global funds continue to flow into AI and semiconductor sectors, Samsung Electronics and SK Hynix saw significant stock price increases. However, the rise in stock prices also caused some fund holdings to reach internal risk management limits, forcing them to reduce their positions.

Market reports indicate that institutions such as GAM Investment Management in Zurich and Jupiter Asset Management in Singapore have adjusted their holdings to comply with the restriction that individual stock holdings must not exceed 10% of the portfolio.

Data shows that by this Thursday, global investors had net sold approximately $63.6 billion worth of Korean stocks this month, marking the largest single-month net sell-off since 1999. Market participants believe that part of the selling is related to fund rebalancing and position limit requirements.

Goldman Sachs analysts in their latest report noted that although most passive reductions triggered by position limit rules may have already been completed, if the market capitalization and weight of Samsung Electronics and SK Hynix continue to rise, a new round of passive selling pressure could be triggered in the future.

Against the backdrop of growing demand for AI computing power, Samsung Electronics and SK Hynix, as global leaders in memory chips, continue to attract capital. The demand for high-bandwidth memory (HBM) products is seen as a key factor driving the valuation increase of both companies. The market is currently focused on shifts in capital flows and the potential impact of passive selling on the future performance of Korean tech stocks.