Don't Be Fooled by Foreigners' 90 Trillion Won KOSPI Sell-off This Year. The Korean Stock Market Has 2 Reversal Cards Left for a Surge.

Summary

Director Lee Ju-yeon argues that recent heavy foreign selling in KOSPI is mechanical portfolio rebalancing, not a fundamental exit, as foreign ownership hit a record high. He expects a reversal catalyst from MSCI index rebalancing and potential developed-market watchlist inclusion in late May to June, making current weakness a buying opportunity. He remains bullish on semiconductors as the main theme due to strong memory demand and long-term supply contracts, and sees Hyundai Motor group oversold on strike fears.

• Foreign selling of 90 trillion won is mechanical, not fundamental.
• Foreign ownership at all-time high despite selling.
• MSCI events in late May/June expected to reverse foreign flows.
• Semiconductors are the core investment theme.
• DRAM prices expected to rise 30-40% QoQ through Q2.
• Hyundai Motor group stocks bottoming after strike overreaction.
• Long-term bond yields likely peaking, reducing macro risk.
• KOSPI expected to rebound on improved foreign supply-demand.