Foreigners sell a net 2.02 trillion won as KOSPI drops 3.65% to 6,384.24

"The KOSPI plunged amid rebalancing of semiconductor-focused exchange-traded funds (ETFs) and concerns that Samsung Electronics and SK hynix may have completed their treasury stock purchases," Lim Seung-mi, an analyst at Hana Securities Co., said in her research note ^[15]. The operative words are "concerns" and "may have". Yonhap's report did not say that either company had stopped buying, and it did not size the rebalancing, so neither half of the explanation can be measured from what was published.

Samsung and SK hynix fell more than the index, but the decline was broad. The index closed at 6,384.24 after a previous close of 6,625.93 ^[9], and Samsung's 4.39% drop and SK hynix's 4.52% drop ^[3] ran 0.74 and 0.87 percentage points worse than the index's 3.65% ^[10]. Hanwha Aerospace lost 3.25% and Hyundai Motor 1.39% ^[7], while HMM rose 4.81% and KT&G 1.58% ^[8].

The counter-thesis has two supports. Individuals were the only net buyers among the three investor groups the report lists ^[4], and the won firmed by 7.7 per dollar, or 0.57%, to 1,335.1 ^[13] on a day when foreigners' net selling equalled 9.5% of the 21.33 trillion won turnover ^[12]. We would take a firmer currency alongside foreign selling as a sign the exit is from particular stocks, though one close is thin evidence for that.

In our view the evidence supports "thinner" support, not "gone". If the purchases are finished, Samsung at 250,500 won and SK hynix at 1.6 million won ^[3] need other buyers at those prices, and retail investors were the only net buyers on the day ^[4].

We would be wrong if Samsung and SK hynix recover at the next session with no fresh purchases, which would show the ETF flow was the whole story. We would also be wrong if foreigners turn net buyers, or if either company confirms it is still buying. After four straight losing sessions ^[2], a fifth with weaker retail buying than Monday's would point the other way.