Goldman Sachs analyst Chris Cha noted in a September 3 report that the Korea Composite Stock Price Index (KOSPI) is facing a critical moment as multiple supporting forces unravel. Retail investors' net buying in August plummeted by 90% from June, dropping from 54.5 trillion Korean Won to 5.4 trillion Korean Won, indicating that the momentum that drove KOSPI's first-half rally has largely dissipated. Concurrently, foreign investors and local institutions also recorded net selling in August.
Currently, the only remaining support comes from corporate share buybacks by Samsung Electronics and SK Hynix. However, Goldman Sachs expects that, at the current execution pace, both companies' buyback quotas will be exhausted prematurely between late September and mid-October, well ahead of the official November deadline. Once this support disappears, KOSPI's direction will almost entirely depend on foreign capital flows and the Korean Won exchange rate. Goldman Sachs advises investors to prepare in advance for a potential liquidity shock in October.
Goldman Sachs: South Korean Stock Market Faces Liquidity Shock, Retail Buying Plunges 90% in August, Corporate Buybacks Expected to Exhaust by October
Source:华尔街见闻 · Source Link
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