Foreign Investors Bet $3.6 Billion on Samsung, SK Hynix as Retail Traders Hold Back

The Wall Street Journal wrote that the Kospi had entered a new bull market after rising more than 20% from its recent low, attributing much of the rebound to revived global appetite for AI-linked shares this month. CNBC, citing LSEG data on stocks, bonds and corporate earnings, reported on Aug. 13 that the Kospi had rebounded about 23% from its late-July low.

The Kospi tumbled 22% in July, its worst monthly drop since the global financial crisis. Losses accelerated as concern grew over whether AI infrastructure spending could continue and leveraged positions, particularly in semiconductor shares, were forced to unwind. The rebound took hold after expectations revived that global companies would keep investing in AI. On Aug. 12, AI cloud company CoreWeave and AI server maker Super Micro Computer posted better-than-expected earnings, sending their shares up 17% and 9%, respectively.

As optimism returned over a rebound in memory demand tied to the spread of AI, Zhang Chen, an emerging-markets equity specialist at U.K. asset manager Baillie Gifford, told Bloomberg that demand for memory is surging because of AI agents and physical AI while supply capacity remains limited. A supply bottleneck exists that only a few companies, including Samsung Electronics and SK Hynix, can resolve, he said.

David Morrison, senior market analyst at U.K. online trading and investment platform Trade Nation, told CNBC that it is still too early to call an end to the AI investment boom. Mark Newton, head of technical strategy at U.S. market research and investment firm Fundstrat Global Advisors, said the memory segment within the technology sector looks positive in the near term. Because Samsung Electronics and SK Hynix account for a large share of the South Korean stock market, a recovery in memory stocks could power further gains in the broader Kospi.

U.S. inflation data also helped improve sentiment toward South Korean equities. July consumer prices matched market expectations, easing concern over a September interest-rate increase by the Federal Reserve. The fading impact of forced deleveraging, which triggered last month’s sharp market selloff, also supported the rebound. Bloomberg reported that government curbs on single-stock leveraged ETFs and a reduction in margin trading helped stabilize market flows.

Foreign Buying Drives the Rally

Analysts pointed to continued foreign net buying as the key driver of the market’s rise. With retail participation still sluggish and investor deposit balances — often viewed as dry powder for individual traders — below 100 trillion won ($72 billion), foreign inflows have become the market’s main source of support.

Over the past three trading days, Samsung Electronics and SK Hynix accounted for the bulk of foreign investors’ net purchases. Foreigners bought about 3.6146 trillion won ($2.6 billion) worth of Samsung Electronics shares and 1.6087 trillion won ($1.16 billion) of SK Hynix.

Lee Jae-won, an analyst at Yuanta Securities, said most of the Kospi’s recent up days have coincided with net foreign buying. With investor deposit balances continuing to decline, retail flows alone would struggle to recreate the record-high rallies in large-cap stocks seen in the past, he said. Foreign buying has played the central role in the Kospi’s rebound.

One market official said profit levels at Samsung Electronics and SK Hynix could step up further if AI infrastructure spending lasts longer than expected and memory shortages persist. “The best moment for Samsung Electronics and SK Hynix has yet to come,” the person said.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com