Individual Profits from Volatile Market... "Funds Will Be Invested in Stocks for the Time Being"

Individual Investors Net Sold 2.4279 Trillion Won from the 1st to the 5th

As the KOSPI started with an increase of over 1%, surpassing the 2200 mark during trading for the first time in three and a half months since the end of February, employees are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul on the 8th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kum Boryeong] Amid the fluctuations caused by the novel coronavirus disease (COVID-19), individual investors have made profits, drawing attention to where these funds will move next. Opinions suggest that these funds are unlikely to leave the stock market for the time being.

According to the Korea Exchange on the 8th, individual investors bought a total of 42.79347 trillion KRW and sold 45.22136 trillion KRW in the KOSPI market from the 1st to the 5th. This amounts to a net sale of 2.4279 trillion KRW over five trading days. The KOSPI index rose by 7.5%, from 2029.60 on the 29th of last month to 2181.87 on the 5th. This is interpreted as individual investors realizing profits.

Samsung Electronics, at the center of the 'Donghak Ant Movement,' saw its stock price rise 9.47% during the same period, from 50,700 KRW to 55,500 KRW. Notably, on the 3rd, it increased by 3,100 KRW, a 6.03% rise compared to the previous session.

Despite the strong net selling trend, the top stocks most net purchased by individuals included Kakao, NAVER, Samsung SDI, Samsung Heavy Industries, SK, and Korean Air. Between the 1st and 5th, individuals net purchased Kakao shares worth 207.147 billion KRW. Although Kakao’s stock price fell 4.74% over five trading days, from 263,500 KRW on the 29th of last month to 251,000 KRW on the 5th, this is seen as a strategy by individuals to buy in advance during price adjustments.

Analysis suggests that individual investors are unlikely to leave the stock market anytime soon. Kim Hyung-ryeol, head of the Kyobo Securities Research Center, explained, "The funds flowing into the stock market from individual investors are essentially idle funds moving to avoid 'zero interest rates.'" He added, "Just because stocks were sold doesn’t mean these funds have anywhere else to go." He further noted, "Zero interest rates are not an issue expected to end this year or next. Individuals likely have predetermined allocations for their investments across deposits, real estate, and stocks."

Meanwhile, from March 19, when the KOSPI index dropped to the 1400s, until the 5th, the average return on the top 10 stocks most purchased by individual investors in the KOSPI market reached 66.5%.

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