Individuals Charging Up Secondary Battery Stocks

Samsung SDI, SK Innovation, etc. "Buy on the Dip"
Investing in Domestic and International Secondary Battery Stocks in the ETF Market

[Asia Economy Reporter Minji Lee] Individual investors are scooping up new growth-related stocks centered on secondary batteries, which led the global stock market last year. As foreign and institutional investors sold off related stocks, causing significant price fluctuations, it is interpreted as reflecting the sentiment of "buying while prices are low."

American electric vehicle manufacturer Tesla is holding a launch event for the top-tier trims P100D of Model S and Model X in Brooklyn, New York. (AP=Yonhap News)

According to the Korea Exchange on the 11th, individual investors have been purchasing large amounts of stocks of secondary battery-related companies such as Samsung SDI (KRW 233.7 billion) and SK Innovation (KRW 144.9 billion) since the beginning of March until the previous day. During this period, the two companies' stocks fell by 5% and 13%, respectively. The decline in secondary battery-related stocks is analyzed to be due to a combination of factors, including the rise in the U.S. 10-year Treasury yield causing a deterioration in growth stock sentiment, patent infringement lawsuits between LG Energy Solution and SK Innovation, and the weak stock prices of global electric vehicle companies.

Although the KRX Secondary Battery K-New Deal Index fell about 5% during this period, individual investors increased their net purchases of constituent stocks such as POSCO Chemical (KRW 50.6 billion), SKC (KRW 30.4 billion), EcoPro BM (KRW 19.8 billion), and Iljin Materials (KRW 16.7 billion).

In overseas markets, net buying of Tesla also increased significantly. Domestic investors, who expanded their investment sentiment in software-related companies such as Unity Software and Palantir last month, purchased KRW 167.1 billion worth of Tesla stocks as Tesla's stock price adjusted downward by about 7% this month. This amount is higher than the KRW 124 billion (estimated at an exchange rate of 1,135 KRW) during the same period last month.

Individual investors continued investing in secondary battery-related stocks in both domestic and international ETF markets. Over the past 10 trading days, individuals purchased about KRW 66.2 billion of the TIGER China Electric Vehicle SOLACTIVE ETF, the largest amount by value. Other top net purchase ETFs included TIGER KRX Secondary Battery K-New Deal (KRW 27.2 billion), KOEDX Secondary Battery Industry (KRW 17 billion), and TIGER KRX BBIG K-New Deal (KRW 3.3 billion).

Money also flowed into ETFs containing new growth companies undergoing adjustments along with secondary batteries. While the Nasdaq index has continued its correction with a 4% decline this month, KRW 17.8 billion poured into KODEX U.S. FANG Plus, which holds major companies. Individual investors' sentiment also concentrated on TIGER China Hang Seng Tech (KRW 9.2 billion) and KODEX China Hang Seng Tech (KRW 4.5 billion).

Securities experts expect that the stock prices of secondary battery companies will move depending on the increase in electric vehicle sales. Although demand for electric vehicles is rising, production and sales interruptions continue due to difficulties in securing automotive semiconductors. According to IHS Markit, production delays caused by automotive semiconductor shortages in the first quarter are estimated to have postponed shipments of 1 million vehicles.

Jang Jeong-hoon, a researcher at Samsung Securities, said, "As expectations for electric vehicle sales have increased, for secondary battery-related companies to grow further, a solid business environment must support them," adding, "If buying driven by growth potential flows in due to supply easing, positive stock price movements can be expected."

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