Korean stock market foreign investors can’t touch! A Korean analyst warns: KOSDAQ has long been infamous for swallowing retail investors’ money

Recently, Korea’s stock market themes have rapidly heated up in overseas investment communities, especially concepts around AI, semiconductors, memory, power equipment, and high-tech supply chains—becoming key focus areas for global investors. However, Jukan, a Korea analyst working at Citrini Research, warned on X that foreign investors should not rush into the KOSDAQ market if they lack sufficient local information and research capabilities.

Well-known analyst: Korean brokerages are understaffed, and company-level data is limited

Jukan said that his recent social media feed is packed with all kinds of “calling out Korean stocks,” so he wants to offer foreign investors a piece of advice: “Don’t touch KOSDAQ casually.” He described KOSDAQ as a bottomless pit that devours the funds of countless Korean retail investors. These remarks have sparked debate precisely because Jukan is Korean himself and has long been paying attention to technology, semiconductor, and Korea stock-market theme plays. Compared with the single-point narratives that overseas investors see on social media, he is more familiar with the information asymmetry and hype culture that have long existed in the Korean market.

KOSDAQ is a market in South Korea dominated by small- and mid-sized companies, tech stocks, biotech stocks, and growth stocks, and it is often compared to the Nasdaq growth-stock market in the United States. However, because listed companies are smaller in scale, theme sentiment can swing sharply, and there is insufficient information transparency and research coverage, the market is prone to intense speculation and rapid capital rotation.

Jukan pointed out that for foreign investors seeking to verify individual KOSDAQ stocks, the first problem is insufficient research data. Korean brokerage firms themselves have limited manpower and do not provide full coverage of KOSDAQ companies; if a company can be covered by brokerage reports five times in a year, that already counts as a decent amount in this market. In other words, the themes many foreign investors see may simply lack enough institutional research support in the first place.

Insider trading scandals are common in the Korean market

If you don’t rely on brokerage reports, is it possible to focus on the news instead? Jukan believes that also isn’t easy. He warned that the Korean market has long had a front-running problem, meaning some people may buy in ahead of news releases or positive catalysts, then drive up stock prices once the information comes out. Jukan also added that recently, even people related to major media outlets were arrested and investigated over alleged front-running.

Therefore, he reminded investors that the “positive news” they see may not be only straightforward reporting on company fundamentals—it could also be aimed at pushing up prices through media coverage by people who already bought the stocks earlier. For foreign investors, if they don’t understand the Korean context, media ecosystem, the quality of local brokerage research, and local market culture, they are likely to become the last bag-holder when the theme is at its hottest.

Taiwan and the U.S. also exist—Jukan: Korea is especially notorious

A netizen named Sterling Archer responded with doubts, arguing that aren’t these problems really no different from other markets, and cited examples saying similar situations may exist in the U.S. and Taiwan too—such as how prominent investor Bill Ackman can influence the market, or how Taiwan’s market also has issues with news-driven hype. In response, Jukan emphasized that Korean KOSDAQ is “especially notorious,” because there are just too many pump-and-dump cases—so many “pump to dump” incidents.

This warning also reflects the risk contrast after Korea’s stock market recently went viral overseas on social media. On one hand, the Korean market does indeed have many companies related to AI infrastructure, HBM, HBF, semiconductor equipment, and power supply-chain—prompting overseas investors to look for the “next SK Hynix” or a “Korean AI supply-chain dark horse.” On the other hand, the smaller the company, the stronger the theme, and the more limited the research coverage, the more likely the stock becomes a target for social media call-outs and capital speculation.

This article, “Korean stocks: foreign investors can’t touch them!” Analyst warns: KOSDAQ has long been notorious for devouring retail investors’ funds — First appeared in Lian News ABMedia.