Domestic Retail Supports North Asia Equity Rally

North Asian equities, particularly in Korea and Taiwan, have seen a strong rally fueled by domestic retail investors offsetting mechanical foreign selling in mega-cap tech stocks.

Key Takeaways

• 1.North Asian markets (Korea and Taiwan) are outperforming YTD, driven by massive domestic retail participation that has offset significant foreign selling.
• 2.Foreign selling in Korea and Taiwan is concentrated in benchmark mega-caps like TSMC and Samsung, suggesting mechanical portfolio rebalancing rather than fundamental de-risking.
• 3.Retail engagement has expanded through multiple channels including cash equities, ETFs, and derivatives, with leveraged ETF AUM reaching 1% of free float in Korea.

Table of Contents

• North Asia Leadership
• Foreign Selling Largely Mechanical, Concentrated in Mega Caps
• Domestic Bid Across Multiple Channels
• Leverage Elevated, Not Stretched
• Retail Tailwinds Support Stock Selection
• Disclosure Appendix
• Global product; distributing entities
• General disclosures

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