Foreign Investors' Single-Day Net Buying of Korean Stocks Hits Record; Citi Maintains KOSPI Target of 3,000
Claire Weston
Foreign investors bought a net ₩7.2 trillion in KOSPI stocks on July 31 — a single-day record. Citi maintains its year-end 10,000-point target, calling the move a fundamental reversal of months of sustained outflows.
₩7.2 trillion in a single day — what does it signal?
Foreign investors net-purchased about ₩7.2 trillion in KOSPI stocks on July 31, the largest single-day net inflow ever recorded.
This means → months of heavy foreign selling were punctured in one session. Citi analyst Jin-Wook Kim called it a "fundamental reversal."
Monthly data confirm the shift: July's net foreign selling narrowed to ₩9.8 trillion, down sharply from ₩44.5 trillion in May and ₩48.4 trillion in June. In plain terms = foreign money went from "rushing for the exit" to "slowing down — and then flooding back in."
Korea's pension funds stopped selling — why does that matter?
Korean pensions and funds net-bought ₩1.0 trillion of KOSPI stocks in July, reversing net sales of ₩2.2 trillion in May and ₩2.4 trillion in June.
Citi notes that near KOSPI 6,500, the National Pension Service (NPS) — Korea's largest pension fund — had cut its domestic equity allocation to 24.2%, down from 29.4% in May.
This means → NPS has already sold heavily; cutting much further risks a public backlash. Citi expects NPS to stay overweight domestic stocks, with an allocation ceiling potentially reaching 28.8% or higher — and to begin rebalancing back into Korean equities if KOSPI climbs to the 9,000–10,000 range.
Retail leverage just got tighter — what does that do to volatility?
From July 31, Korea's Financial Services Commission tripled the minimum margin for retail access to single-stock leveraged ETFs — from ₩10 million (mixed stock and cash) to ₩30 million (cash only).
The effect was immediate: trading volumes in major single-stock leveraged ETFs dropped to roughly 50% of their monthly average, and the market capitalization of 16 such ETFs shrank visibly.
In plain terms = highly leveraged retail traders amplify short-term swings in both directions. Raising the barrier keeps more of them out, which should dampen volatility.
Why is Citi still holding a 10,000-point target?
Citi maintains its year-end KOSPI target at 10,000 points, citing three pillars: solid memory-chip fundamentals, KOSPI valuations at historic lows, and the possibility that Korean financial authorities may set up a stock-market stabilization fund.
This reflects Citi's broader thesis: foreign inflows returning + institutions flipping from sellers to buyers + regulators dampening volatility — three forces converging at what it sees as a market floor.
Citi leaves one open question — whether the ₩7.2 trillion single-day record can translate into sustained capital inflows. That, it says, is the key variable for the 10,000-point call.
Content is for reference only, not financial advice.