The Korean stock market witnessed a dramatic tug-of-war in November, as foreign investors engaged in a record-breaking selling spree while individual investors stepped in to aggressively buy the dip. This market dynamic presents both opportunities and concerns for the future of the KOSPI.
## Foreign Exodus: A Record Sell-Off
Foreign investors net sold a staggering 14.456 trillion Korean won worth of stocks in November, according to the Korea Exchange. This marks the largest monthly net sell-off ever recorded, surpassing even the peak of the COVID-19 pandemic in March 2020. The driving force behind this exodus appears to be a resurgence of the “AI bubble theory,” leading to a significant offloading of Korean semiconductor stocks. Specifically, SK Hynix and Samsung Electronics were the primary targets of this foreign selling spree. Other sectors like holding companies, finance, shipbuilding, defense, and nuclear power, which previously fueled the KOSPI’s rise, also faced considerable selling pressure.
## Retail to the Rescue: Buying the Dip
Countering the foreign outflow, individual investors net bought 9.287 trillion Korean won in November. They primarily focused on scooping up shares of SK Hynix and Samsung Electronics, seeing the dip as a buying opportunity. This large-scale retail buying spree is the third largest on record, highlighting the confidence of Korean individual investors in the long-term prospects of these tech giants.
## Expert Outlook: Hold or Fold?
Analysts offer mixed perspectives on the situation. Some suggest that the foreign selling might not represent a long-term trend, pointing to the fact that foreign ownership ratios in key companies like SK Hynix remain within historical averages. Others emphasize the improving earnings outlook for Samsung Electronics and SK Hynix, suggesting that the recent dip presents a compelling valuation opportunity. Overall, the prevailing sentiment leans towards holding onto existing positions and even considering buying opportunities in the sub-4,000 KOSPI range.
