Korea Weekly Kickstart

The KOSPI gained 5% following Nvidia's earnings, despite continued heavy foreign selling. Foreign outflows of roughly US$62bn are largely attributed to technical diversification limits rather than fundamental weakness.

Key Takeaways

• 1.KOSPI rose 5% driven by strong Nvidia earnings and tech sector outperformance.
• 2.Significant foreign selling of Korean equities (US$62bn) is primarily due to diversification requirements under the Investment Company Act of 1940 rather than fundamentals.
• 3.The leveraged ETF market in Korea is relatively small, with a market share of around 4%, and retail inflows are favoring conventional ETFs.

Table of Contents

• Charts of the week: Leverage ETF Market Status and Retail Investors' Exposures
• Charts of the Week: Diversification Requirements and Selling Pressures Estimate by Market Concentration
• Summary
• Investment flows
• Macro Indicators
• Performance
• Valuations
• Valuation discount relative to Global and Asia regional peers
• Flows
• Currency, rates and commodities
• Korea ERB, Credit and Market Technicals
• Disclosure Appendix

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