[J.P. Morgan: KOSPI plunges 40%, deleveraging nearing completion, valuation enters recovery window] Deep Tide TechFlow reports, according to Tide Research, J.P. Morgan's July 29 research note pointed out that South Korea's KOSPI index has dropped nearly 40% since its June 22 peak. Leveraged ETF assets have shrunk from $50 billion to $17 billion, and hedge fund long-short ratios have decreased from 5.7x to 3.2x, with deleveraging progress exceeding 90%. The forward price-to-earnings ratio of KOSPI has fallen to 5x, reaching crisis levels. Foreign investors have cumulatively net sold over $110 billion, but 90% of the sell-off is concentrated in two major memory chip giants. As their weightings in the MSCI Emerging Markets Index have dropped from 9.5% and 8.3% to 6.5% and 4.5%, passive selling pressure has significantly eased. J.P. Morgan believes that with positions cleared and valuations attractive, the Korean stock market has entered a valuation recovery window, favoring sectors related to wealth effects, biopharmaceuticals, preferred stocks, and banking stocks.