Is a known positive not a positive? The real reason stock prices are falling

Summary

Deputy General Manager Lee Jae-gyu analyzes the Korean stock market selloff, attributing it to excessive retail buying and leverage in semiconductor leaders. While still bullish long term on Samsung Electronics and SK Hynix, he recommends reducing overweight positions now. He sees a rotation into deeply oversold sectors such as shipbuilding and biotech, naming HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Biologics as promising names. He also advocates using KOSPI ETFs to capture broad rebounds during sharp declines and stresses strict risk management.

• Samsung Electronics and SK Hynix remain fundamentally attractive but face near-term correction risk from crowded retail positioning and leverage.
• Investors with semiconductor exposure above 50% are urged to trim positions to manage downside risk.
• Shipbuilding stocks, led by HD Hyundai Heavy Industries and Hanwha Ocean, are deeply oversold and positioned for a strong H2 rebound.
• Samsung Biologics is highlighted as a quality biotech name to consider as the sector shows relative resilience.
• KOSPI ETFs are recommended as the primary tool to play market bounces before rotating into emerging sector leaders.
• KOSDAQ and KOSPI mid/small-caps have fallen to historically extreme levels, warranting close attention for a potential recovery.
• Foreign investor flows are seen as the most decisive factor for market direction in the coming weeks.