'Samcheonpi·Cheonseudak' Cooled Down as Much as It Heated Up... Returning to Early Year Levels

Yongdusami 2021 Stock Market Review
Brief Surge Early in the Year, Sideways Trading Range
Shaken by Continued External Shocks
COVID-19 Variants Also Hinder Economic Recovery
Investment Sentiment Weakens, Investment Enthusiasm Declines

[Asia Economy Reporter Song Hwajeong] This year’s stock market showed a head-and-tail pattern. At the beginning of the year, the KOSPI soared sharply, reaching the 3000 mark for the first time ever, and the KOSDAQ also surpassed the 1000 mark for the first time in 20 years. Although the stock market heated up from the start of the year with the achievement of ‘Samcheonpi·Cheonsudak’ (KOSPI 3000 and KOSDAQ 1000), the bullish trend did not continue. The box range market persisted, and the investment enthusiasm of individual investors, which had been the driving force behind the stock market’s strength since last year, also cooled down.

As of 10 a.m. on the 30th, the KOSPI recorded 2990.02, down 3.27 points (0.11%) from the previous day. The KOSDAQ rose 0.2 points (0.02%) to 1028. The KOSDAQ started weak but succeeded in turning upward.

The KOSPI rose 6.13% this year. The KOSDAQ increased by 7.38%, surpassing the KOSPI’s gain. Considering that the KOSPI rose 30.75% and the KOSDAQ 44.68% last year, it can be seen that the market experienced a brief surge at the beginning of the year followed by a box range market.

The KOSPI surpassed 3000 for the first time ever on January 7 this year, supported by increased exports based on global economic recovery and improved performance of domestic companies. The entry into the 3000 level was the first since the index was announced on January 4, 1983, and came 13 years and 5 months after reaching 2000 on July 25, 2007. Subsequently, on July 6 this year, it recorded an all-time closing high of 3305.21. The KOSDAQ also surpassed 1000 points on April 12 this year, driven by recovery in investment sentiment due to global economic recovery and the strength of bio stocks related to COVID-19 diagnosis and treatment. The KOSDAQ’s recovery to 1000 points was the first in 20 years and 7 months since September 14, 2000, during the IT boom.

Although the market reached the heights of Samcheonpi and Cheonsudak, the stock market continued to be shaken by persistent external shocks throughout the year. Global inflation and concerns over U.S. monetary tightening suppressed the market, while regulatory issues from China and global supply bottlenecks negatively affected stock prices. Additionally, the emergence of COVID-19 variants acted as obstacles to economic recovery.

As the stock market turned into a head-and-tail pattern this year, investor sentiment also weakened. The total daily trading volume of the domestic stock market halved from an average of 42 trillion won in January to about 20 trillion won this month. The investment enthusiasm of individuals, who had driven the market’s rise since last year, is cooling down. Individuals have net purchased 75.7561 trillion won in the domestic stock market this year up to the previous day, exceeding last year’s 63.924 trillion won by more than 10 trillion won. In contrast, foreigners and institutions have net sold 25.7101 trillion won and 43.1436 trillion won, respectively, during the same period. Although individuals had a significant influence on the market this year, their buying strength weakened as the box range market persisted, and in November, they turned to net selling for the first time this year on a monthly basis. They also net sold 8.6911 trillion won this month. Lee Kyungmin, a researcher at Daishin Securities, explained, “With prolonged supply chain bottlenecks and increased inflationary pressure, the normalization of U.S. monetary policy accelerated, and manufacturing recovery slowed, causing Asian markets, including the domestic market, a representative emerging market, to underperform.”

Despite the box range market, investment enthusiasm for public offerings remained strong. This year, the amount raised through initial public offerings (IPOs) in the KOSPI market set a record high, supported by the activation of listings of future growth companies in the BBIG (Battery, Bio, Internet, Game) sectors. SKIET, which went public this year, raised 22.459 trillion won, KakaoBank raised 25.526 trillion won, and Krafton raised 43.098 trillion won, attracting investor interest. The KOSDAQ market’s IPO proceeds also reached a record high of 3.6 trillion won. This was due to an increase in technology-special listing mainly among materials, parts, equipment, and bio companies. The total amount raised through public offerings in both KOSPI and KOSDAQ markets was 20.8 trillion won, more than double the 10.2 trillion won in 2020.

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