Korea Sheds $6.2 Billion in August as Asia Rotates Away From AI

Foreign traders pulled $6.2 billion out of South Korean shares in August. Taiwan drew $1.7 billion, ending a six week promoting streak, Bloomberg-compiled knowledge reveals.

The cut up factors to a broader sample. Money is rotating out of Korea’s chip-heavy KOSPI towards markets seen as steadier bets on synthetic intelligence (AI).

A Wider Asian Reshuffle

The Korea-Taiwan swing is an element of a bigger regional shift. Foreign investors sold a web $25.48 billion of Asian equities in July. It was the ninth straight month of web outflows.

Taiwan and South Korea alone misplaced greater than the area’s total web outflow in July. Taiwan shed $22.95 billion that month, separate from August’s swing again to inflows. Korea shed $6.26 billion in July, a July complete distinct from the $6.2 billion August outflow cited above.

Inflows into India, Thailand, Indonesia and the Philippines solely partly offset these July losses.

Bloomberg-compiled knowledge additionally reveals analysts raised Taiwan’s 12-month earnings estimates quicker than Korea’s final month. It was the primary time in practically a yr that Taiwan’s revision moved forward.

“The unusually high swings in AI-related sectors are making international traders diversify.”

Herald van der Linde, head of Asia-Pacific fairness technique at HSBC, made that time in a word cited by Reuters. He stated the volatility presently leaves India comparatively higher positioned.

Why Korea Looks Riskier to Some Investors

Hebe Chen, senior market analyst at Vantage Global Prime, pointed to Korea’s heavier leverage and speculative positioning. She said that may enlarge value swings even with none shift in fundamentals.

South Korea’s KOSPI posted its largest fall since early March, late final month. The rout was pushed by a stoop in leveraged bets tied to Samsung Electronics and SK Hynix. A $19 billion leveraged AI-linked ETF unraveled in the method, hitting Korean retail investors hardest.

Not each investor sees Korea as the weaker wager, although. Isaac Thong, senior funding director at Aberdeen Asian Income Fund, disagrees. He said Korea seems to be comparatively engaging given how far its valuations have fallen in opposition to Taiwan’s.

Where the Money Is Going Instead

Indian equities logged a $1.3 billion weekly foreign buy final month, the biggest since mid-2025.

Global funds are favoring markets seen as much less depending on AI capital spending than Korea or Taiwan. Thailand, Indonesia and the Philippines additionally logged inflows in July, although on a smaller scale than India.

Thailand pulled in $1.46 billion over the identical interval. Indonesia and the Philippines logged smaller positive aspects, at $88 million and $69 million respectively.

The hole in scale issues. Together, these 4 markets absorbed a fraction of what Korea and Taiwan misplaced. Analysts describe the transfer as a rebalancing act, not a wholesale return to the area.

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