AI Halo Fades: Korean Stocks Swing from Global Best to Global Worst
nashnova research
Korea's Kospi has fallen 22% in the second half, flipping from the strongest major index to the weakest; foreigners have pulled a net $131 billion this year as AI money accelerates toward Taiwan.
How did Korean stocks go from first to last in six months?
Kospi led all major global indices in the first half, drawing heavy inflows. In the second half it dropped 22%, ranking dead last.
Over the same period, Taiwan's weighted index rose 70% and U.S. stocks kept hitting record highs — same AI theme, different destination.
This means → Korea's problem is not that the AI thesis broke. The market decided Korea is no longer the cheapest way to play AI.
Samsung and Hynix are making money — why won't the stock price rise?
Samsung Electronics and SK Hynix together account for over 50% of Kospi's weighting. They drove the first-half rally; now they are the drag.
Last Thursday Samsung reported quarterly operating profit up nearly ninefold year-on-year — yet the stock fell. Once profits are banked, the market sees no next catalyst.
In plain terms = memory chips — the core components that store data in phones and servers — have shifted from growth stocks to value stocks. Profitable but no longer exciting. Momentum money won't chase that.
Once buybacks stop, who steps in?
Samsung and Hynix are close to completing a combined ₩55 trillion share-buyback programme. JPMorgan data show their repurchases accounted for the bulk of roughly $23 billion in buy orders last month.
This means → when the buybacks end, the market faces a clear buying vacuum — the single largest bid is about to exit.
Richard Tang, head of research at Julius Baer Hong Kong, notes that capital is increasingly flowing back to U.S. equities, intensifying Korea's foreign outflows.
Where did the retail investors go?
Retail traders were a key driver in the first half. The July crash scared them off, and they have not returned.
Margin balances sit at roughly ₩33 trillion, well below the June peak of ₩38.6 trillion. Cash parked in brokerage accounts has dropped from a record near ₩140 trillion to about ₩100 trillion.
This reflects a simple calculus among retail and fast-money hedge funds: they don't chase cheap; they chase growth. Memory-chip stocks look inexpensive on current earnings — and that is precisely the wrong pitch for this crowd.
Why is AI money shifting to Taiwan?
Taiwan's weighted index outperformed Kospi by roughly 23 percentage points last quarter — the widest quarterly gap this century.
The rally is also broader: about 10% of Taiwan's constituents have at least doubled this year, versus just 4.7% for Kospi. In plain terms = Taiwan isn't riding one or two heavyweights — the entire AI hardware supply chain is lifting.
Chun-Lai Wu, head of Asia asset allocation at UBS Global Wealth Management, says Taiwan offers a more complete tech-hardware ecosystem, backed by strong spending plans from major tech companies — exactly why institutions are moving tactical AI exposure there.
What signal would mark a Kospi bottom?
The key checkpoint: whether new buying emerges after the buyback wave ends.
If foreign outflows slow and retail margin balances start recovering, it signals the market is re-pricing memory chips for growth again.
This means → until then, Kospi will likely stay under pressure — the old buyer is leaving, and the new one hasn't arrived.
市场有风险，内容仅供研究参考，不构成投资建议。