Leveraged retail investors, foreign net buying to drive KOSPI rally

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Korea’s stock market rally is expected to continue, driven by heavily leveraged retail investors and a renewed wave of foreign net buying, as optimism grows over a global recovery in the semiconductor industry, data showed Friday.

The rally is being driven mainly by semiconductor giants Samsung Electronics and SK Hynix, which are attracting both retail investors borrowing on margin and strong foreign net buying.

According to the Financial Supervisory Service, margin loans linked to Samsung Electronics reached a record 1.8 trillion won ($1.35 billion).

Margin balances are funds borrowed by investors against shares they have and are widely viewed as a barometer for speculative trading by retail investors.

Margin loans have nearly doubled since October and are more than twice the level seen during the 2021 post-pandemic rally, when Samsung’s share price was also soaring. SK Hynix has seen a similar buildup.

Margin loans linked to the chipmaker reached 1.15 trillion won, up sharply from 884.1 billion won at the end of last year.

As for the broader market, total margin lending climbed to 27.87 trillion won as of Wednesday, an all-time high.

The surge in leverage follows Samsung’s strong fourth-quarter earnings last year, which exceeded market expectations and reinforced the view that the semiconductor industry is in a longer, more durable upcycle.

The company posted an operating profit of 20 trillion won, up 208 percent year-on-year and 64 percent from the previous quarter, setting a new quarterly record and surpassing its previous peak from 2018.

Rising prices for commodity memory chips and strong growth in high-bandwidth memory (HBM) sales — fueled by demand from artificial intelligence — have heightened expectations that supply constraints will persist.

Macquarie, an investment bank, raised its target price for Samsung Electronics to 240,000 won and for SK hynix to 1.12 million won.

Adding to the rally’s momentum, foreign investors became net buyers of Korean equities for the first time in a month, acquiring 1.52 trillion won worth of listed shares in December 2025.