Foreign investors have net sold nearly $110B worth of South Korean stocks within the year, increasing the pressure on retail investors to step in.

Odaily Planet Daily News, 丨 Since the beginning of this year, foreign investors have cumulatively withdrawn nearly $110 billion from South Korea’s stock market, reaching a historical high. The main reason is to avoid an imbalance in their portfolio allocation ratio caused by the rapid rise of the South Korean stock market. This means that South Korean domestic retail investors are bearing most of the buy-side demand. After buying 42.4 trillion won in June, South Korean retail investors this month have already recorded cumulative net purchases of 13.2 trillion won worth of KOSPI stocks.

As of July 14, the outstanding financing balance used by retail investors to invest in KOSPI stocks was 28 trillion won. On June 24, it had previously hit a historical high of 29.8 trillion won. A

French bank Lion Securities’ Chief Stock Strategist Alexander Redman said, “South Korea is still the market with the highest overweight position in our portfolio, but I’ve already started cutting back. What worries me is that the current market is mainly driven by retail investors, because they are using a large amount of margin trading.” (Jinshi)