[Weekly Market Review] Retail Investors Buying BBIG Taking a Breather "This Is the Opportunity"

[Asia Economy Reporter Oh Ju-yeon] In the third week of September, domestic individual investors mainly accumulated stocks in the BBIG (Bio, Battery, Internet, Game) sectors, including NAVER, Celltrion, and Kakao, which have shown a weak stock price trend this month.

According to the Korea Exchange on the 19th, individuals purchased NAVER stocks worth 198.9 billion KRW in the KOSPI market from the 14th to the 18th. NAVER's stock price rose to 347,000 KRW last month but has fallen to the late 200,000 KRW range this month, showing weakness. On the 18th, it traded at 298,000 KRW, down 0.83% from the previous trading day. Seeing this price decline as a buying opportunity at the bottom, individual investors ranked NAVER first in net purchases.

The second highest net purchase was Samsung Electronics preferred shares (144.4 billion KRW), followed by Celltrion (110.4 billion KRW) and Kakao (80.1 billion KRW), ranking third and fourth respectively. Recently, these stocks have shown clear weakness. However, there is analysis suggesting they could enter a rising rally from the second half of the year, attracting individual investors hopeful for this.

NAVER and Kakao have been spotlighted as untact (non-face-to-face) related stocks due to the impact of COVID-19, and they are also evaluated to sustain solid growth from a fundamental (corporate performance) perspective. NAVER's third-quarter sales are expected to increase by 14.1% year-on-year to 1.8992 trillion KRW, and operating profit by 36.4% to 275.2 billion KRW. Kakao is also expected to exceed 1 trillion KRW in sales and record an operating profit of 114.6 billion KRW in the third quarter, increasing by 29.5% and 94.0% respectively compared to the same period last year.

Individuals also paid attention to Hanwha Solutions, whose stock price rose sharply due to policy momentum such as the Green New Deal, purchasing 70.2 billion KRW worth and ranking sixth in net purchases. Additionally, anticipating the listing of Big Hit Entertainment next month, they also heavily bought Korea Financial Group (61.5 billion KRW, ranked seventh in net purchases).

The reason individuals are enthusiastic about buying BBIG stocks is interpreted as a psychology of "buying while taking a breather." Securities firms also diagnose that investment demand for these stocks will continue. Lee Jae-sun, a researcher at Hana Financial Investment, said, "The newly announced BBIG K-New Deal Index by the exchange differs from the past KRX300 index in that it specifically presents stocks, so direct and indirect benefits to these sectors are expected," adding, "The combined market capitalization of the top 12 major stocks in the four BBIG K-New Deal sectors increased from 20.3% at the end of June to 21.6%, and the proportion of operating profit in the stock market is also likely to increase from the current consensus level of 3.6% to about 6.6% in 2022." Shin Seung-jin, a researcher at Samsung Securities, forecasted, "Leading stocks such as BBIG are highly likely to rebound after short-term negative factors are resolved."

On the other hand, LG Chem, which was the top net purchase by individuals until early this month, along with SK Hynix, appeared among the top net sales stocks. Disappointment selling surged following news that LG Chem is pushing for a spin-off and IPO of its battery division. Individuals sold LG Chem stocks worth 266.3 billion KRW, ranking second in net sales after SK Hynix (698.4 billion KRW).

However, securities firms view this as a positive rather than a negative. The battery business division is expected to receive a proper valuation compared to competitors, and after the physical spin-off, it will be possible to secure investment funds through liquidity such as listing the battery division.

Meanwhile, in the KOSDAQ market, Kakao Games ranked first in net purchases by individuals with 184.1 billion KRW. Kakao Games, which was listed on the 10th, formed an opening price at 44,000 KRW, double the public offering price of 24,000 KRW, and surged intraday to 89,100 KRW on the 14th. However, due to profit-taking selling afterward, it fell to 63,400 KRW as of the closing price on the 18th.

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