Kospi Back in Bull Market as Chip Stocks Lead Rebound
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- Kospi climbed more than 20% from its July low to re-enter bull-market territory after a rout driven by leveraged positions and forced selling pushed the benchmark into bear-market territory last month.
- Peter Kim, head of global investment strategy at KB Securities, said valuations and earnings were never seriously in doubt during the rout, attributing the sell-off to technical factors, fund flows and the unwinding of leveraged positions.
- Phillip Wool of Rayliant Global Advisors warned that Korea's equity market is "basically synonymous with the AI hardware trade," making any soft hyperscaler capex guidance or sagging token pricing a likely pullback trigger.
- Billy Leung of Global X ETFs credited Korea's "Value-Up" corporate governance reforms with helping reduce the longstanding "Korea discount," though he cautioned that elevated retail participation and heavy index concentration resemble late-cycle behavior.
- Jung In Yun of Fibonacci Asset Management Global urged caution, saying investors should not describe the rebound as "a completely new bull market" and warned that some consolidation would be healthy after such a steep move.
- The unwinding of leveraged positions eased after regulators tightened rules and brokerages normalized margin and risk requirements, according to Kim, potentially leaving the market on firmer footing than before the crash.
Why it matters: With the Kospi's rally concentrated in a handful of semiconductor companies tied to AI infrastructure spending, any softening in Big Tech capex guidance could trigger sharp pullbacks — but the Value-Up program's reduction of the Korea discount offers a structural tailwind beyond the chip cycle.
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