The Struggle of Donghak Ants, 6.5 Trillion Won Injected but...

Foreign Investor Outflows Met with Donghak Ants' Buying
Ongoing Tug-of-War with Foreigners Amid Exchange Rate, Geopolitical Factors, and Semiconductor Market Shift

[Asia Economy Reporter Hwang Junho] Donghak Ants (domestic individual investors) are doing their utmost to prevent the KOSPI from falling. However, the index defense failed as foreign investors continued net selling.

According to the Korea Exchange on the 13th, individual investors net purchased 6.5384 trillion KRW for five consecutive trading days on the KOSPI from the 6th to the 12th. Including the KOSDAQ and other markets, they bought stocks worth 7.4718 trillion KRW during the same period.

Individual investors have been continuously net buying to hold up the falling market as foreign investors withdrew 4.5403 trillion KRW from the entire market and 4.4470 trillion KRW from the KOSPI alone for four consecutive trading days. As of 10:50 a.m. on the day, they were still betting on buying stocks worth 1.284 trillion KRW, putting all their efforts into preventing the index from falling.

Thanks to the persistent net buying by individual investors, the KOSPI held the 3,200 level until the previous day. However, it gave way to the 3,200 level on the day. It dropped to the 3,100 level for the first time in 54 trading days since May 28. Along with individual investors, institutions also net purchased stocks worth 192.8 billion KRW, but they could not withstand foreign investors’ net selling of 1.4928 trillion KRW. SK Hynix recorded a seven-day consecutive decline and lost its position as the second-largest market cap on the KOSPI to NAVER.

The focused buying stocks are the leading stocks Samsung Electronics and SK Hynix. They net purchased 3.4596 trillion KRW over the past five days. SK Hynix alone was bought for 1.9801 trillion KRW.

Individual investors still have some capacity to hold on, but the psychological support line has collapsed due to the continuous decline. Following mega initial public offerings (IPOs) such as KakaoBank and Krafton this month, investor deposits rose to 71 trillion KRW and then recovered to around 66 trillion KRW. Deposits refer to peripheral funds that can be injected into the stock market. The balance of credit loans has also shown a steady trend since rising to the 24 trillion KRW level on the 1st of last month.

However, as the index continues to decline, investor sentiment has deteriorated. As of the 12th, the KOSPI investor sentiment index stood at 30%, slightly above the depressed level of 25%. The KOSPI has recorded six consecutive days of decline, starting from 3,280.38 on the 4th to 3,276.13 the next day. However, the daily average decline is about 0.37%, which is mild, with a total drop of 2.24%.

The struggle between individual investors and foreign investors is expected to continue for the time being. Han Ji-young, a researcher at Kiwoom Securities, analyzed, "The recent strengthening of foreign investors’ net selling on the KOSPI is due not only to their concentrated net selling of the semiconductor sector but also to macroeconomic factors such as the rise of the won-dollar exchange rate touching the 1,160 KRW level." Foreign investors are gradually withdrawing from the domestic stock market due to improved U.S. employment indicators, expectations of a change in the Federal Reserve’s accommodative monetary policy direction amid soaring inflation, and the Chinese government’s increased regulations on companies. In particular, net selling of semiconductor stocks is strong. Song Myung-seop, a researcher at Hi Investment & Securities, said, "According to the semiconductor industry cycle, the indicators that began to decline from March this year are expected to reverse and rise from early the second quarter of next year."

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