Once-hot AI trade leaves Korean stocks struggling for buyers
South Korea's stock market is facing a significant downturn after a dominant run in the global AI sector, as the Kospi has dropped 22% since its peak, marking it as the worst performer in the second half of the year. A startling 70% decline in turnover has prompted withdrawals from both foreign and local investors.
South Korea's stock market, once a shining example of the global AI trade, is now struggling to attract investors. The country's Kospi index, which had seen a 100% rally in the first half of the year, has since lost 22% and is now the worst-performing benchmark in the second half. The market's AI fortunes are heavily reliant on Samsung Electronics Co and SK Hynix Inc, two leading memory-chip giants, but this concentration is now seen as a liability as investors question the sustainability of the memory chip boom.
Combined buybacks by Samsung and SK Hynix have reached $41 billion, but this has also led to a sharp decline in market turnover, with foreign investors retreating at the fastest pace in Asia. The market now faces skepticism over the durability of the memory chip boom and reluctance from global funds to return.
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