00:06If you hold Korean stocks or an ETF tracking Korea, yesterday's 8.95% crash and today's
00:13snapback are connected by one mechanic, not by any change in the economy. Goldman Sachs
00:20says leverage ETFs, not weak fundamentals, forced that plunge.
00:26Foreign investors just pulled a record $30.72 billion out of Korean stocks and bonds in
00:32June alone. And bank deposit rates are climbing, giving your cash a real alternative to sitting
00:38in equities. Here's what actually moved the market. And what didn't. It's Wednesday, July
00:4615th. Let's look at what this means for retail investors in Korea.
00:51Korea's Kospi plunged 8.95% Monday, triggering a circuit breaker, before rebounding 0.73% the
00:59next day to close at 6,856.83. Goldman Sachs traced most of the panic selling to leverage
01:07ETFs unwinding positions mechanically, not to any shift in company fundamentals. At the same
01:14time, foreign investors have been pulling money out of Korean stocks for 6 straight months,
01:20even as bank deposit rates start climbing. Here's what the numbers show. Foreign investors
01:26net sold 1.67 trillion won, $1.12 billion, and institutions net sold 2.23 trillion won, or
01:35$1.50 billion, or $1.50 billion, during Monday's crash, with 45.4% of that selling coming from
01:42program trades, according to Goldman Sachs. The Kospi rebounded 0.73% to close at 6,856.83,
01:53as foreign and institutional investors bought back 969.5 billion won, or $649 million,
02:01and 3.22 trillion won, or $2.15 billion. Korea's central bank reported a record $30.72 billion in
02:12foreign net outflows from local stocks and bonds in June, extending a six-month streak of stock fund
02:19withdrawals. Savings banks raised their average 12-month deposit rate from 3.24% in April to 3.93%
02:28by July 13, a 0.69 percentage point jump in three months. A one-point rise in the Kospi's monthly
02:36return can slow deposit growth by up to 93 billion won, or $62 million, over the following three
02:44months, per a TOS Insight report. J.P. Morgan surveyed 50 Asian investors in Singapore who broadly expect
02:52memory chip fundamentals to hold steady over the next one to two years. So what does this mean for
02:58retail investors in Korea? Earlier, we said yesterday's crash was mechanical, not fundamental.
03:05That distinction matters if you're deciding how to read the swings in your own portfolio.
03:10The bigger risk isn't the daily volatility itself. It's that record foreign outflows are shrinking
03:16the market's cushion against future swings. With savings bank deposit rates now above 3.9%,
03:23it's worth watching how that shifts the competition for your cash, even before you decide to act.
03:29That's today's AI Prism, Retail Investors. This episode was produced with AI Assistants based on
03:37Seoul Economic Daily Reporting and reviewed by a human editor. AI Prism is a Juan Ifra award-winning
03:44series. We'll be back tomorrow. You've been listening to AI Prism from Seoul Economic Daily.
댓글