Han stocks fall again by nearly 9%, yet Morgan Stanley turns bullish
Samsung Electronics and SK Hynix both closed down by nearly 9% today, and even the U.S. stock trading in the memory sector before the bell has started to be affected by South Korean shares.
But just when the market is at its most panicked, Morgan Stanley has upgraded Korean stocks to “overweight,” setting a KOSPI target of 9,000 points, implying roughly 36% of potential upside.
It is betting not on “the selloff is already over,” but on the most intense leveraged sell-off having already passed.
This downturn in South Korea follows a very clear chain:
Large-cap stocks fall → leveraged ETFs are forced to cut positions → the index continues to drop → margin accounts and hedge funds sell again.
Fundamentals determine direction, while leverage determines speed.
But you still can’t blindly bottom-fish now:
The truly cheap ones are mainly Samsung and Hynix—not the entire South Korean market.
Foreign capital has not yet returned on a sustained basis.
Retail margin financing and leveraged products have not been fully cleared.
Next, focus on three things: whether the two companies increase shareholder returns, whether HBM4 prices and orders can hold steady, and whether the cycle for the new-generation iPhone in September can lift demand for consumer memory.
This may be a “leveraged floor,” but it’s not yet a bottom where “everyone can win.”
Do you believe deleveraging is closer to the finish line, or will you wait for foreign inflows and confirmation from industry data?
Samsung Electronics and SK Hynix both closed down by nearly 9% today, and even the U.S. stock trading in the memory sector before the bell has started to be affected by South Korean shares.
But just when the market is at its most panicked, Morgan Stanley has upgraded Korean stocks to “overweight,” setting a KOSPI target of 9,000 points, implying roughly 36% of potential upside.
It is betting not on “the selloff is already over,” but on the most intense leveraged sell-off having already passed.
This downturn in South Korea follows a very clear chain:
Large-cap stocks fall → leveraged ETFs are forced to cut positions → the index continues to drop → margin accounts and hedge funds sell again.
Fundamentals determine direction, while leverage determines speed.
But you still can’t blindly bottom-fish now:
The truly cheap ones are mainly Samsung and Hynix—not the entire South Korean market.
Foreign capital has not yet returned on a sustained basis.
Retail margin financing and leveraged products have not been fully cleared.
Next, focus on three things: whether the two companies increase shareholder returns, whether HBM4 prices and orders can hold steady, and whether the cycle for the new-generation iPhone in September can lift demand for consumer memory.
This may be a “leveraged floor,” but it’s not yet a bottom where “everyone can win.”
Do you believe deleveraging is closer to the finish line, or will you wait for foreign inflows and confirmation from industry data?