Samsung, SK Hynix Rally Forces $69B in Selling as Funds Hit Stock Limits

A searing rally in Samsung Electronics Co. (005930.KS) and SK Hynix Inc. (000660.KS) has triggered forced selling by fund managers hitting single-stock concentration limits, driving record foreign outflows from South Korean equities. Global investors sold a net $63.6 billion of Korean stocks this year through Thursday, with $58.6 billion coming from the two chipmakers, after their AI-fueled surges pushed holdings beyond 10% caps. Goldman Sachs Group Inc. estimates diversification rules have forced $69 billion in selling since late October from Korea-focused funds managing nearly $200 billion. Funds including GAM Investment Management and Jupiter Asset Management have reshuffled portfolios to comply. Some managers are turning to proxy plays such as SK Square Co., which holds a 20.5% SK Hynix stake, while Samsung Life Insurance Co. has more than tripled in the past year. Korean public funds are exempt from the 10% cap, allowing market-weight holdings that now exceed 27% for Samsung and 15% for SK Hynix, but global managers remain constrained, potentially capping further inflows despite strong performance.