[Deputy Manager Column] Donghak Ant Movement and Samsung Electronics

[Asia Economy Reporter Song Hwajeong] The Donghak Movement, which resisted government corruption and foreign powers in 1894, has been revived in 2020. This time, it is in the stock market. After the outbreak of the novel coronavirus disease (COVID-19), as foreigners massively sold domestic stocks, individual investors stepped in to absorb the volume, drawing a parallel to the Donghak Peasant Movement that stood against foreign forces, and thus it is called the 'Donghak Ant Movement.'

Foreigners have launched a record-breaking selling offensive in the domestic stock market since COVID-19. From the 5th to the 30th, they continued net selling for 18 consecutive trading days in the KOSPI market. The cumulative net selling amount on a monthly basis reached approximately 12.4772 trillion KRW. Since the first confirmed COVID-19 case on January 20, the selling scale has exceeded 17 trillion KRW. On the other hand, during this period, individuals net bought 18.3505 trillion KRW in the KOSPI market. Except for two days this month, they have continued net buying.

In particular, the tug-of-war between foreigners and individuals was prominent over Samsung Electronics. Since the 17th of last month, individuals have not stopped buying Samsung Electronics except for one day. During the same period, foreigners bought Samsung Electronics only on three days and continued selling on the other days. During this period, foreigners sold Samsung Electronics worth 6.9377 trillion KRW, ranking first in net selling, while individuals bought 6.6694 trillion KRW, ranking first in net buying. In other words, individuals absorbed most of the volume sold by foreigners.

The investment behavior of ants during the COVID-19 market showed a different pattern from before. Rather than betting on stocks that briefly rose like theme stocks in the past, they massively purchased large-cap blue-chip stocks. They recognized that a sharp decline in the prices of large-cap blue-chip stocks was an opportunity for bargain buying and invested accordingly. Looking at the top net buying stocks by individuals this month, many representative stocks of industries were included, such as Samsung Electronics, Hyundai Motor, Samsung Electronics Preferred, SK Hynix, Samsung SDI, LG Chem, SK Innovation, Korea Electric Power Corporation, and Kakao.

Considering that in the past, individuals acted counter to the market direction by selling in rising markets and buying in falling markets, and that from 2000 to 2019 they net sold a cumulative 76 trillion KRW in the KOSPI, which was pointed out as a trigger for the collapse of the domestic stock market's supply-demand base, the current movement of individuals is evaluated as an unusual behavior.

The uncertainty of the stock market due to COVID-19 is ongoing. The spread of COVID-19 has not yet subsided, and concerns about an economic recession are growing. Recently, with unprecedented support measures announced by countries including the United States, the global crash has somewhat calmed down, but if recession concerns materialize, there is a possibility that turmoil will again sweep through the market. It is still premature to confidently say that individuals will win in this market, but the ant rebellion, which has become a strong supporter of the domestic stock market unlike in the past, is meaningful enough on its own.

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