In 2026, foreign investors have sold approximately $62 billion worth of Kospi-listed shares, with a notable net outflow of 1.24 trillion won (about $801 million) reported on June 5.
Analysts from Goldman Sachs attribute this selling to structural pressures rather than deteriorating market fundamentals, as the Kospi's strong performance has forced active fund managers to reduce their positions to comply with portfolio limits. Nomura's Chetan Seth noted that this trend resembles past patterns in India, where domestic retail participation has crowded out foreign investors.
Despite the selling, domestic investors have compensated with around $70 billion in inflows this year, alongside a surge in brokerage account openings. Concerns over risk concentration, particularly regarding reliance on major companies like Samsung Electronics and SK Hynix, have also emerged.
Nevertheless, market experts maintain a positive outlook on Korean equities, with Goldman Sachs raising its 12-month Kospi target to 12,000, suggesting a potential 37% upside