Korean equities face a leveraged-retail liquidation that is getting out of control. Per @fintergirl, young Koreans priced out of Seoul apartments are buying the KOSPI with 5x portfolio margin and 2x single-stock ETFs; 360,000 accounts have been liquidated, 62% of them held by under-35s, and KOSPI margin loans hit a record 38.63 trillion won at end-June. Retail losses on borrowed money reached 2.15 trillion won in a month, with more liquidation likely. SK hynix is already back to April levels. … Show more

Korean stocks are being crushed by a leveraged retail bet on a memory boom that ignored the industry's cyclicality. Samsung and SK hynix make up about 50% of the market's weight, and investors piled in on leverage on the belief that sub-10 forward P/Es meant up only. The 3x leveraged Korea ETF fell 33% in a day and 70% since June 1. Per @zerohedge, 1.2 million Korean leveraged retail accounts hit margin calls by July 13, with 320,000-360,000 forcibly liquidated. x.com 

Korean equities are seeing smart money buy a retail panic at the bottom. Local retail investors hit by margin calls dumped a record 8.2 trillion won, while foreign institutions bought a record 7.2 trillion won in a single day. x.com 

Korean equities are vulnerable as leveraged domestic retail buyers, who replaced massive foreign withdrawals as the source of SK Hynix and Samsung demand, are being forced out. Per @SamanthaLaDuc, Korea's Financial Supervisory Service reported 1.2 million leveraged retail accounts hit margin calls on July 13, and 320K-360K were fully liquidated. x.com 

Retail leverage and AI concentration have fueled the Korean equities rout. The KOSPI fell more than 14% in a week, its worst weekly decline since 2008. Korean equities will fall further if the rout in SK hynix and Samsung continues, though some dip buyers may already be lining up. x.com  x.com 

Korean equities' 17.91% rebound looks higher quality because foreigners and institutions absorbed heavy retail selling as leveraged ETF trading collapsed. Foreigners bought over KRW 7 trillion of stocks, about 75% in SK hynix, Samsung Electronics and related names, but barely any index futures, signaling real rebuilding. Retail sold KRW 8.25 trillion, shifting from leveraged dip-buying to cutting risk. Under new rules, single-stock leveraged ETF turnover fell from KRW 12.4tn to 3tn. x.com 

Korean equities' forced deleveraging is not over, with the first stage of margin calls now under way. Brokers auto-liquidated 360,000 accounts, 62% of them held by under-35s who used margin and 2x leveraged ETFs, per @Normal_2610. KOSPI margin loans hit a record KRW 38.63tn in late June, retail losses from borrowed money reached KRW 2.15tn in a month, and the government opened a debt counseling hotline. The liquidation phase is still continuing. x.com  x.com  x.com 

Korean equities look like a leveraged mania in which money arrived faster than judgment, and borrowers may not survive the drawdown. Samsung and SK Hynix now make up over 54% of the KOSPI, up from 16% in 2016, and margin loans hit a record 36 trillion won, double a year ago, as Koreans surrendered insurance policies to buy stocks. On July 14 Samsung fell 10.70% and SK Hynix 15.37%, and the KOSPI sits near 6,750 from above 8,000. The businesses and the AI buildout remain real. x.com 

Korean equities look near a bottom as retail investors who levered long at the KOSPI top now short it at the lows. After new rules effective July 31 raised the minimum deposit for single-stock leveraged ETFs to ₩30M, retail net-sold over ₩1 trillion of single-stock leverage on day one, led by SK hynix and Samsung products, and bought about ₩500bn of index inverse ETFs instead, led by a 2x KOSPI inverse fund. x.com  x.com 

Korean equities and memory chip stocks are not done selling after South Korea hiked rates today. x.com