KOSPI Rebounds Over 20% Within Ten Trading Days — How Long Can This Bull Run Last?

South Korea's KOSPI index rose more than 4% intraday on Thursday (August 13), rebounding approximately 22%–23% from its July 30 low of 5,593.56 points, crossing the globally accepted technical bull market threshold of a 20% recovery from lows, officially re-entering a bull market phase.

Last month’s crash remains fresh in memory: KOSPI plunged 22% in a single month, marking its worst monthly performance since the global financial crisis. A cascade of forced liquidations hit leveraged ETFs and single-stock leveraged positions, triggering margin calls for over 1.2 million accounts, with more than 300,000 retail investors fully liquidated. The exchange activated circuit breakers nine times this year alone.

Subsequently, South Korea’s financial regulators raised the minimum margin requirement for single-stock leveraged ETFs from 10 million to 30 million won. As a result, daily trading volume for leveraged ETFs plummeted from 12.45 trillion won to 3.31 trillion won, significantly easing overall market deleveraging pressure.

Peter Kim, Head of Global Strategy at KB Securities, noted that the profitability and demand logic within the AI supply chain were never fundamentally questioned during the downturn—selling was purely driven by liquidity and technical factors. "It’s fundamentals that brought the market back to normal, not emotional speculation," he said.

Phillip Wool, Research Head at Rayliant, cautioned that Korean equities now essentially serve as a proxy for AI hardware trades. The rebound has been fueled by the end of forced liquidations, short covering, and FOMO (fear of missing out) sentiment. However, he warned that high volatility could return if any key variable reverses—such as cloud providers’ capital expenditure guidance, token prices, or Federal Reserve tightening expectations.

Billy Leung, ETF Strategist at Global X, pointed out that corporate value-enhancement initiatives and governance reforms are gradually eroding the long-standing "Korea discount." This rally appears more fundamental-driven than bubble-like, yet characteristics typical of late-stage bull markets—such as heightened retail enthusiasm, index concentration, and collective target price upgrades—are already emerging.

Yun Jung-in, Founder and CEO of Fibonacci Asset Management Global, urged against overinterpreting the 20% threshold: "This is technical repair after forced liquidations and a return to stability—not the start of an entirely new bull cycle." He described the base case as continued upward revisions in semiconductor earnings and improving risk appetite, albeit at a slower pace with increasing volatility. "A consolidation phase after a sharp rally is healthy," he added.

Experts agree that KOSPI completed its bear-to-bull transition in just ten trading days because underlying HBM and AI memory demand remained intact, while the immediate catalyst was capital replenishment following deleveraging. However, the Korean market remains heavily dependent on just two stocks—Samsung and SK Hynix—and even minor ripples in the AI narrative could violently shake this "single-core semiconductor" market.