Korea Strategy: Korea’s next re-rating: From liquidity and leverage rally to fundamental recalibration

研报英文原文证据摘录

Korea Strategy: Korea’s next re-rating: From liquidity and leverage rally to fundamental recalibration

Global Markets Research

28 July 2026Korea Strategy

EQUITY: EQUITY STRATEGY

Korea’s next re-rating Research Analysts

Korea Strategy

From liquidity and leverage rally to fundamental Cindy Park - NFIK

cindy.park@nomura.comrecalibration

+822 3783 2324

Corporate buybacks to become next structural driver Dongmin Lee - NFIK

We believe the Korean equity market’s correction to 6,691 (24 July 2026) from a peak of dongmin.lee@nomura.com

9,115 (22 June 2026) was driven by the following flow factors: (1) heavy selling by foreign +822 3783 2338

investors (KRW158tn; USD108bn) as Korea's benchmark weight exceeded portfolio Asia Pacific Technology

limits, (2) slowing institutional support as National Pension Service’s domestic asset CW Chung - NIHK

allocation approached practical limits, and (3) rapid growth in leveraged ETFs and newly cwchung@nomura.com

launched single stock leveraged products creating volatility (Fig.9). We believe these +852 2252 6075

factors led to amplified volatility despite resilient corporate fundamentals. As market YJ Kim, CFA - NFIK

“deleveraging” progresses and foreign selling pressure eases, the next leg of Korea's re- yj.kim1@nomura.com

rating is likely to be supported by corporate share buybacks and treasury-share +82237832332

cancellations, particularly from large-cap companies, in our view. We estimate Korea’s Korea Autos & Auto Parts

share buybacks to be KRW116tn/274tn/328tn for 2026F/27F/28F, ~90% of which will Angela Hong - NFIK

likely stem from the two large semiconductor companies (including buybacks for angela.hong@nomura.com

employee bonus and shareholder return). This should become a new structural source of +822 3783 2360