Overseas Direct Buyers Excluding Tesla and Investing in ETFs

Tesla Sold Worth 462.5 Billion KRW This Month
Investor Sentiment Drops Amid Early Tapering Concerns
"Value Stock-Focused Investment Expected to Increase"

[Asia Economy Reporter Minji Lee] Overseas direct purchase investors' love for Tesla is fading. Instead of selling Tesla stocks this month, they are turning their attention to semiconductors or corporate bond ETFs (Exchange Traded Funds). This is analyzed to be due to a significant decline in investment sentiment toward growth stocks amid expectations that early tapering (asset purchase reduction) could begin sooner because of inflation.

According to the Korea Securities Depository's information system SaveRO as of the previous day on the 13th, the stock most sold by domestic investors this month was the U.S. electric vehicle company Tesla, with a total of about 462.5 billion KRW worth of shares sold. As the selling scale increased, Tesla fell out of the top 50 overseas stocks in net purchases by domestic investors.

It is interpreted that investment sentiment toward growth stocks, which are sensitive to interest rate hikes, has weakened due to expanding inflation concerns in the U.S. Although Tesla posted a record high profit of 670 billion KRW in the first quarter, excluding the Bitcoin sale gains (110 billion KRW), the profit margin was not large, which seems to have worsened investor sentiment. Coinbase, which rode the coin craze and ranked third in net purchases last month, only recorded net purchases of 8.1 billion KRW this month.

The stock replacing Tesla was the retail company Amazon (53.3 billion KRW). Microsoft (27.3 billion KRW) and Alphabet (22.2 billion KRW), classified as growth stocks, were also purchased, but investment sentiment toward non-growth stocks also improved. Domestic investors bought 24.5 billion KRW worth of Boeing shares, and value stocks such as Berkshire Hathaway and SoftBank were also net purchased at 13.5 billion KRW and 12.1 billion KRW, respectively.

Among ETFs, interest is expanding mainly in semiconductors. The ETF with the largest net purchase scale is SOXL (DIREXION DAILY SEMICONDUCTOR BULL 3X), with domestic investors buying about 32.2 billion KRW worth. This product can yield three times the profit or loss depending on the movement of the Philadelphia Semiconductor Index. As the Philadelphia Semiconductor Index sharply dropped about 11% from 3108.99 to 2851.15 this month due to a correction in U.S. IT tech stocks, demand for bargain buying appeared to have increased.

Securities experts predict that more time will be needed until uncertainties about growth stocks are resolved. Kim Hak-gyun, head of the research center at Shin Young Securities, explained, "Big tech companies are exposed to antitrust regulatory risks, and inflation expectations remain high, so interest rates will rise again. Growth stocks carry a heavy burden due to long-term rises, so it is necessary to approach mainly value stocks."

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