0428 GMT - A pullback in South Korean equities has effectively flushed out a lot of the excess leverage, say HSBC analysts led by Herald van der Linde, head of equity strategy for Asia Pacific. The bank raises South Korea to overweight from neutral, saying volatility remains elevated but has fallen from its highs. If Korean equities continue to outperform, active funds may find it difficult to add exposure without breaching concentration limits, potentially leading to continued selling, HSBC says. However, this should not be a major headwind as long as domestic demand for equities remains firm.
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