Repeated sharp selloffs: foreigners' large-scale selling and surging exchange rate — healthy correction or bear-market signal? Meritz Securities Deputy Manager Lee Hwa-jin

Summary

Lee Hwa-jin of Meritz Securities discussed whether the Korean market's sharp swings, heavy foreign selling, and rising USD/KRW are a healthy correction or a bear-market signal. He remains constructive on KOSPI over time, sees a possible KRW rebound if MSCI developed-market inclusion occurs in June, and favors Korean memory semiconductors on HBM supply tightness and hyperscaler capex. He also flagged record margin debt as a near-term volatility risk and discussed rebound catalysts for Korean biotech, Alteogen, and ABL Bio.

• Korean equities saw individuals buying heavily while foreigners sold; the speaker views foreign selling as rebalancing rather than a negative fundamental signal.
• KOSPI can potentially reach 6,000-7,000 over time, but a healthy correction and margin deleveraging are likely first.
• June MSCI developed-market inclusion is a key event that could strengthen the Korean won.
• Korean memory semiconductors remain favored due to HBM supply shortages, sold-out capacity through 2H 2027, and large hyperscaler capex.
• Korean biotech and pharma may revive on obesity, RNA, and ADC technology-transfer catalysts around ACR and ASCO.
• Alteogen could rebound on patent, licensing, and Dupixent subcutaneous-conversion catalysts.
• ABL Bio could rebound on ABL301 and ABL001 clinical and royalty catalysts.
• Record margin debt and exhausted credit limits raise forced-selling and volatility risk.