Key points
- Korean individuals made money in the Kospi in only one month of the first half of 2026. Foreigners made money in every month.
- In the week to Aug 14, individuals sold 7.40 trillion won ($5.2B) as the Kospi rose 11.5% back toward 7,000, and foreigners bought 6.75 trillion won ($4.8B) of it.
- Foreigners now trade more of the Kospi than individuals do, 37.91% against 31.58%, the first time the local crowd has been passed.
Add up the Korean stock market this year and one thing stands out. The foreigners made money and the locals mostly didn't.
Through the first six months, Korean individual investors came out ahead in exactly one of them, April, when strong Samsung Electronics and SK Hynix earnings carried the market. Foreign investors came out ahead in all six. The split was widest in May, when a record wave of foreign selling knocked the market down. That month the foreigners booked their best result of the year and the individuals booked their worst.
The last two weeks are the same story in miniature. This time the market went the individuals' way, and they still ended up on the wrong side of it.
On Aug 14 the Kospi passed 7,000 for a short time, its first time above the line since July 24, before closing at 6,977.94, up 2.42 percent. Foreigners bought almost the whole move, a net 3 trillion won ($2.1B) on Friday and 6.75 trillion won ($4.8B) across the week. Individuals sold 7.40 trillion won ($5.2B), more than any other group.
They bought the fall and sold the bounce
To see how they got there, follow the round trip. While the market was dropping from its July 24 high, individuals kept buying, close to 8 trillion won ($5.6B) of stock on the way down. It fell to 5,593.56 on July 30, about 40 percent below its June high, and the most heavily borrowed accounts were sold out there by their brokers, willing or not. I wrote about that forced selling here.
Then, on July 31, the market turned, rising 17.91 percent in one session, the largest one day rise the Kospi has ever had. And on the turn, and on every strong day after it, individuals were the sellers. In the week the index climbed back above 7,000 they sold 7.40 trillion won, almost exactly what they had bought on the way down. Foreigners took nearly all of it.
Some of that selling is people just getting even. Yuanta Securities (유안타증권) researcher Lee Jun-young estimated that individuals' average buying price on the Kospi this year sat around 7,300 to 7,400. Many are back to break-even only now, after months of holding stock worth less than they paid. When it finally reached their cost again, they sold.
Why one side keeps winning
The plain reason foreigners keep coming out ahead is that they buy on a plan and the crowd buys on a feeling. Foreign and institutional desks move large blocks on set rules. Individuals tend to bargain-hunt a drop or chase a rally. That's how they wound up buying near the top in the spring and selling near the bottom in the summer.
The foreign buying at the July low wasn't a lucky guess either. Several Korean brokerages were treating the crash as a discount, and foreign desks bought into the worst of it while the local crowd was being forced out. When the market then turned, the people who had bought the low were foreign, and the people selling into the recovery were Korean.
A smaller crowd every month
The crowd on the losing side of these trades is also shrinking. Individuals made up 48.11 percent of Kospi trading in January. By July that was 31.58 percent. Foreigners were 37.91 percent, trading more of the Korean market than the locals for the first time. The market is thinner too, with daily trading down about 27 percent from June to July, to 36.8 trillion won ($25.9B) a day. Some of that money didn't stay home, it went to US stocks, which I wrote about here.
That leaves the direction of the market in foreign hands, at least for now. Yuanta researcher Lee Jae-won put it plainly. "In the end, for the Kospi's rise to keep going, what matters most is foreigners coming back as steady net buyers," he wrote. Na Jung-hwan at NH Investment & Securities (NH투자증권) said the recent gains came from foreign and institutional buying, and read it as a phase where the market is starting to price company earnings again after a summer driven by fear.
Samsung Securities (삼성증권) research head Kim Jong-min was more careful about how far it runs. "As long as there is no extreme shock from interest rates, the market is likely to keep recovering," he said, though he added that the real question is still whether the wild swings settle down.
Seoul is closed for the Liberation Day holiday and reopens on Tuesday. Whether the local crowd comes back to chase what is left of the recovery, or the foreign money keeps setting the price on its own, is the first thing that session will show.
Sources
- 시사저널e, 개인은 4월만 벌고 외인은 내내 수익 코스피 매매차익 비교해보니, on which investor group made money each month
- 블로터, 코스피 7000선 눈앞…개인 7.4조 팔고 외국인 6.8조 샀다, on the weekly investor flows and the NH Investment comment
- 이투데이, 하루평균 4.2% 요동친 코스피 15거래일 만에 7000선 터치, on the 7000 touch and individuals' average buying price
- 디지털투데이, 코스피 7000선 눈앞 외국인 귀환 미 금리 흐름 주목, on the Yuanta and Samsung Securities comments
- 파이낸셜뉴스, 떠난 개미 자금 코스피 현물로 돌아올까 개인 거래비중 반년 만에 48%→31%, on individuals' falling share of trading
- 서울경제, 5월 44조 던진 외국인 코스피 순매도 역대 최대, on the record May foreign selling
Figures are from South Korean market reporting as described above, converted to US dollars at about 1,420 won to the dollar. The analyst comments are translated from Korean. Source titles are in the original Korean. This is general market commentary and not investment advice.
