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Capital shifts toward Samsung Electronics and SK hynix amid regional equity rotations
Sunday, March 1, 2026 at 03:33 AM
Capital flows within emerging markets have shifted from Hong Kong toward South Korea, specifically concentrated in Samsung Electronics and SK hynix. While South Korea's market strength appears broad, it is primarily driven by these two semiconductor leaders. Meanwhile, Alibaba is highlighted for its AI large language model capabilities despite market focus on traditional economic recovery.
Context
Global investors are rotating heavily out of the Hang Seng Tech Index and into the Korean semiconductor sector, specifically targeting Samsung Electronics and SK Hynix. Since February, this "two-man show" has dominated regional capital flows, with the two chip giants absorbing liquidity previously held in Chinese tech giants. While the broader Korean market appears robust, the gains are concentrated almost exclusively in these AI-linked leaders, leaving the rest of the market to trade passively in their wake.
Conversely, Tencent and Alibaba have seen valuations compressed to historic lows, with Tencent now trading at a low-teens P/E ratio. Despite Alibaba possessing top-tier AI large language models, its stock remains weighed down by domestic consumption concerns. With Korea now showing short-term overbought signals and crowded positioning, analysts expect a potential moderation in this rotation as the risk-reward ratio shifts back toward these undervalued Chinese tech leaders.
Related Companies
Alibaba
9988
SK Hynix
000660
Samsung Electronics
005930
Tencent
700