"Betting Double?"... Ants Lead 18.5 Trillion Won 'Buying Rally' in Plunging Market

[Asia Economy Reporter Koh Hyung-kwang] It has been revealed that individual investors have purchased stocks worth a staggering 18.5 trillion won in the domestic stock market since the beginning of this year. Despite the stock market experiencing continuous sharp declines due to the impact of the novel coronavirus infection (COVID-19), individuals have been scooping up stocks without hesitation. This appears to be a strategy of buying at low prices and aiming to secure profits when the market rebounds in the future, but as the COVID-19 pandemic shows signs of prolongation and the stock market falls into a state of shock, concerns over losses for individuals pursuing a low-price buying strategy have grown even larger.

According to the Korea Exchange on the 15th, individual investors have net purchased stocks worth a total of 15.3252 trillion won in the KOSPI market from the beginning of this year until the 13th. Following 4.483 trillion won in January, the net purchase amount in February also reached 4.8974 trillion won. Even though less than half a month has passed this month, they have already bought stocks worth 5.9448 trillion won, far exceeding the previous month's purchase amount.

The net purchase amount in January (4.483 trillion won) was the largest monthly purchase amount by individuals since the Korea Exchange began compiling trading trend statistics by investor type in September 2001, and the 'buying rally' has continued to surpass that amount every month. This is a completely different trend from foreigners and institutions, who have shown net selling dominance of 9.7059 trillion won and 7.1796 trillion won respectively this year.

Individuals have also purchased stocks worth 3.2187 trillion won in the KOSDAQ market this year. Combining KOSPI and KOSDAQ, the net purchase amount rises to 18.5439 trillion won. This is the first time individuals have bought so much in such a short period at the beginning of the year. Even during the recent three trading days when the KOSPI index plunged by 10%, individuals continuously bought stocks worth 2 trillion won.

The aggressive buying by individuals is interpreted as a low-price buying strategy based on the expectation of a future rebound. However, there are considerable concerns that it is difficult to expect a short-term rebound as the COVID-19 situation is likely to prolong, with the World Health Organization (WHO) declaring a pandemic.

Seosangyoung, a researcher at Kiwoom Securities, explained, "It is extremely unusual for individual investors to buy around 5 trillion won every month," adding, "As the COVID-19 impact caused a correction in the market, individuals seem to have taken this as a buying opportunity." Kim Yong-gu, a researcher at Hana Financial Investment, diagnosed, "If the global economic slowdown due to the spread of COVID-19 intensifies, the stock market decline could be greater than now, and individual losses could also be significant."

Individuals concentrated their purchases on semiconductor stocks. The top three stocks in terms of net purchases by individuals this year were Samsung Electronics, Samsung Electronics Preferred, and SK Hynix, with purchases worth 5.5836 trillion won, 1.2945 trillion won, and 781.9 billion won respectively. Half of the total purchase amount (7.66 trillion won) was invested in semiconductors. This was followed by Korea Electric Power Corporation (473.2 billion won), Hyundai Motor Company (434.5 billion won), SK Innovation (379.3 billion won), Shinhan Financial Group (375.5 billion won), Kia Motors (314.3 billion won), and S-Oil (265.7 billion won). None of these stocks have risen this year.

This content was produced with the assistance of AI translation services.