AI investment booms up the Korean stock market and further deepens market dependence on a few chips. Goldman Sachs warns that the combined weight of Samsung Electronics and SK Hercules in the Korea Consolidated Stock Price Index has risen to about 60 per cent, and that, if it rises by a further 1 percentage point, foreign investment agencies that are partly subject to the United States rules of decentralized warehousing may be passively reducing their positions by about $2 billion.
Two companies have a weight of about 60%.
Thanks to AI-related demand, Samsung electronics and SK Hercules stock prices have increased significantly in recent years, leading to a significant increase in Korea ' s composite equity index. Together, the two companies now account for about 60 per cent of the Kospi weight, up from about 40 per cent two years ago.
This structure has made the Korean stock market more sensitive to the volatility of a few large technology units. In contrast, the combined weight of Yin Weida and apples in the NASDAQ index is about 20 per cent, and the concentration of front companies in the Japanese market is significantly lower.
Goldman Sachs calculates foreign investment or passive reduction
According to Wall Street, citing Goldman Sachs analysis, if the combined weight of the two companies continues to rise by 1 percentage point, overseas funding, which is partly subject to the decentralization requirements of the United States Investment Companies Act, may need to be adjusted to withdraw about $2 billion from the Korean market.
At the same time, Goldman Sachs noted that the current market is vulnerable not only from concentration of weights, but also from leverage ETF, dynamic options trading and the accumulation of diaspora bond financing. A combination of several types of funds magnifies volatility, which may result in a marked deviation of stock price fluctuations from the basics of the enterprise.
- Three-star electrons and SK Hercules combined weigh about 60%.
- 1 percentage point of weight per litre, FDI outflows or $2 billion
- Korea Exchange has triggered the melting mechanism five degrees this year.
Leverage trades are warming in tandem with regulatory actions
South Korean stock market volatility has significantly increased in the recent past. According to the report, Kospi fell 10 per cent last Tuesday and 5.8 per cent again on Friday. Switzerland's Goldman Sachs data show that this year the MSCI South Korea index went up and down by more than 5 per cent a day, up to one fifth of the year's trading day, well above last year's.
The morning-star analysis suggests that Samsung electrons and SK Hercules have a high shareholding ratio and the size of the financing bond, which means that, once the market has returned, additional bonds and passive silos may further magnify the decline.
Korean regulators have begun to address the risks of volatility. The Korea Exchange has launched a 20-minute melting mechanism on several occasions this year, and some of the planned large stock weekly options have been postponed. The head of the Korea Financial Supervisory Authority also publicly stated that it was regrettable that the failure to stop single-shape leverage ETF from being listed in May.
The current focus of market attention has shifted from the rising space brought about by AI transactions to a chain of fluctuations that may be triggered jointly by centralized warehousing, leveraging funds and passivity.