Donghak Ants Led by Hwang So-jang, Achieve 'Home Run' Returns

Individuals Snatch Large Blue-Chip Stocks
Top 10 Net Purchased Stocks Rise by an Average of 55.97%

[Asia Economy Reporter Song Hwajeong] This year, the stock market experienced rollercoaster-like fluctuations due to the novel coronavirus disease (COVID-19). It was the power of Donghak Ants that lifted the KOSPI, which had plummeted during the COVID-19 panic market in March, to an all-time high.

According to the Korea Exchange on the 30th, individual investors have net purchased 64.289 trillion KRW in the domestic stock market so far this year. During the same period, foreigners and institutions have net sold approximately 25 trillion KRW and 36 trillion KRW, respectively. The fact that the KOSPI, which had sharply dropped to 1457.64 on March 19, was raised to the 2820 level shows the significant power of individual investors. The previous record for individual net purchases was 10.9 trillion KRW in October 2018, meaning the scale of individual net purchases has increased more than sixfold.

This year, individual investors exhibited different trading behaviors compared to the past, leading the stock market's upward trend. Rather than investing mainly in theme stocks that show short-term rises as before, they focused on buying large-cap blue-chip stocks. As the prices of large-cap blue-chip stocks dropped sharply due to COVID-19, individuals saw this as a buying opportunity and invested. In the past, individuals were criticized for acting counter to market trends by selling in rising markets and buying in falling markets, but this year they led the market through bold bets and excellent stock selection.

Kim Hakgyun, Head of Research Center at Shin Young Securities, evaluated, "There is a saying that 'when individuals buy, it's the market top,' but this year was an unusual year where individuals raised stock prices despite selling by foreigners and institutions."

Individual investors, who focused on large-cap blue-chip stocks, also earned substantial investment returns this year. The top 10 stocks by net purchases by individuals this year are Samsung Electronics, Samsung Electronics Preferred, Hyundai Motor, NAVER, Shinhan Financial Group, Kakao, SK, Korea Electric Power Corporation, Celltrion Healthcare, and SK Hynix, which have risen an average of 55.97% this year. Among them, the stock with the largest increase was Celltrion Healthcare, which rose 216% so far this year. The next highest return was from Kakao, which increased by 150%. On the other hand, Shinhan Financial Group, SK, and Korea Electric Power recorded negative returns, falling 24%, 5%, and 10%, respectively, this year. However, compared to the sharp market drop in March caused by COVID-19, all these stocks recorded positive returns. Samsung Electronics, the most purchased stock by individuals, rose 40% this year.

The buying momentum of individual investors is expected to continue next year. Choi Seokwon, Head of Research Center at SK Securities, said, "Due to low interest rates, real estate policy regulations, reduced attractiveness of overseas investments caused by the strong Korean won, and avoidance of medium-risk medium-return assets due to private equity fund issues, individual inflows into the stock market will continue until next year," adding, "However, the inflow speed will slow down compared to this year."

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