The Market Created by a Vicious Cycle of Leverage, How Far Will the Rebound Go? | Lee Hyeok-jin, Yeo Do-eun, Heo Jae-mu

Summary

Lee Hyeok-jin, team lead at NH Investment & Securities, argues that the recent sharp sell-off was a leverage-driven unwind, not a fundamental crisis, and expects a technical KOSPI rebound to 7,000–7,500. He advises investors to diversify away from concentrated memory semiconductor positions and highlights opportunities in KOSDAQ, Korean healthcare, Hyundai Motor Group robotics, and stocks heavily sold by foreigners. Tactical trading of Samsung Electronics and SK hynix is preferred over long-term holding.

• The 30% KOSPI drop was caused by excessive leverage, setting up a technical rebound to 7,000–7,500.
• Single-stock leverage ETF regulations will redirect flows into Samsung Electro-Mechanics and SK Square as historical leverage proxies.
• Market normalization will broaden gains to KOSDAQ, with pension fund buying and government policies providing tailwinds.
• Korean healthcare/biotech stocks are poised for a catch-up rally after lagging the global healthcare rebound.
• Hyundai Motor Group robotics stocks are attractive buys as semiconductors lose their extreme concentration and funds disperse.
• Foreign investors will return on a stronger won, driving a rebound in their most-sold names: Samsung Electronics, SK Square, Hyundai Motor, and PharmaResearch.
• Samsung Electronics and SK hynix should be traded tactically within a range-bounce strategy, not held for a structural bull run.