January Record Set by Ant Investors: "Will the 200 Trillion Won Net Purchase Myth Be Established This Year?"... No Damage to Upward Trend

Record Monthly Net Buying in January
Index Declines Amid Heavy Selling by Institutions and Foreigners
Net Buying Trend Continues Despite Estimated Negative Returns in January

[Asia Economy Reporter Lee Seon-ae] Ants set a new January record: ‘Will the 200 trillion won net purchase myth be established this year?’… No damage to the upward trend

Individual investors set various new records throughout January. Despite heavy selling pressure from institutions and foreigners, individuals’ net purchase amount in January reached the highest monthly figure ever recorded. If investor deposit funds (around 70 trillion won) continue to flow in, there is even speculation that this year’s net purchase amount by individuals could surpass 200 trillion won.

According to the Korea Exchange on the 1st, individuals net purchased 22.3384 trillion won in the KOSPI market and 3.5165 trillion won in the KOSDAQ market, totaling 25.8705 trillion won, setting an all-time monthly record. Compared to January last year (6.2725 trillion won), this is a 312.4% surge. This amount is about 40% of last year’s total net purchase amount of 63.7 trillion won (KOSPI 47.3 trillion won, KOSDAQ 16.3 trillion won).

The record for the largest net purchase in a single day was also set. On the 26th of last month, individuals net purchased 4.205 trillion won in the KOSPI market and 411.3 billion won in the KOSDAQ market, totaling 4.6166 trillion won, achieving the highest daily record. Accordingly, while it took 53 trading days last year to surpass 20 trillion won in net purchases, this year it only took 17 trading days.

Individuals net purchased on 15 out of 19 trading days in January, excluding 4 days. In contrast, institutions net purchased on only 3 trading days, and foreigners on 9 trading days. Institutions and foreigners net sold 19.606 trillion won and 5.92 trillion won respectively during January.

Although individuals effectively supported the stock market, their January performance was negative (estimated return rate). The average estimated return rate of the top 10 stocks by individual net purchase was -5.9% (a simple average comparing the average net purchase price per stock to the closing price on January 29), which was lower than institutions (2.5%) and foreigners (-2.5%).

The stock market also seemed to struggle to maintain an upward curve solely by individual power. On the last trading day of January, the 29th, the KOSPI and KOSDAQ indices plunged 3.03% and 3.38% respectively to close the session. This marked the first time since the four consecutive trading days of decline on October 13, 14, 15, and 16 last year that both indices fell for four consecutive trading days from January 26 to 29, deepening the correction trend.

Nevertheless, the general consensus in the securities industry is that the individual net purchase momentum will remain unchanged. This is based on the judgment that after the correction, the stock market will eventually rise.

Lee Kyung-min, a researcher at Daishin Securities, said, “Although the KOSPI, which has shown an unstoppable upward trend since November, is shaking, Korea’s differentiated fundamental drivers remain valid in the global economic recovery phase, and price and valuation attractiveness remain.” He added, “The KOSPI’s valuation level compared to the global market is only about 68%, so revaluation is expected to continue, and short-term volatility expansion is rather seen as an opportunity to increase weight.”

Roh Dong-gil, a researcher at NH Investment & Securities, also emphasized, “There is a possibility of adjusting expectations for the speed of economic recovery, and institutional selling pressure may continue for a while. However, the downside of risk asset preference sentiment is supported, and it is not the time for the stock market’s upward trend to break.”

The fact that investor deposit funds have maintained a level between 68 trillion and 70 trillion won after reaching an all-time high of 74.4559 trillion won on the 12th of last month also supports the outlook for a rising stock market. Kim Young-hwan, a researcher at NH Investment & Securities, said, “A phenomenon similar to when the KOSPI surpassed 2000 is appearing. At that time, individual investors used 80% of their saved money to purchase stocks, and if this trend continues, the net purchase amount by individuals this year could reach 200 trillion won.”

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