JPMorgan Sees Limited Near-Term Buying From South Korean Retail Investors

JPMorgan said weak market sentiment and likely continued outflows from leveraged exchange-traded funds mean South Korean retail investors are unlikely to buy stocks in large size in the near term, according to ETNet. Analysts Rajiv Batra, Mixo Das and others said in a research note that corporate buybacks have become another new source of demand for South Korean domestic stocks, while buying from long-only funds has also started to recover. They added that emerging-market investors and global investors still have room to add exposure, but emerging-market investors are currently significantly underweight South Korea and are no longer constrained by investment mandate terms. The note said investors are currently overweight Chinese electric vehicle stocks, consumer stocks, Indian banks, and South Korean holding groups and banks.