KOSPI Continues Slight Fluctuations... LG IPO Supply-Demand Imbalance 'Only Institutions Buy Alone'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 18th, the KOSPI, which started higher, is continuing to move sideways with slight fluctuations.

On this day, the KOSPI opened up 8.88 points (0.32%) at 2898.98 compared to the previous trading day (2890.10), and has been fluctuating between the high 2880s and low 2890s. As of 10:54 AM, it is trading at 2888.59.

Seosangyoung, a researcher at Mirae Asset Securities, said, "Due to the inevitable supply-demand imbalance caused by LG Energy Solution's IPO, the Korean stock market has recently been reacting sensitively to some negative factors," adding, "The supply-demand instability caused by the LG Energy Solution IPO will lead to active responses to companies with improving earnings in the KOSPI correction."

He continued, "Since Korean corporate profits, which have been adjusted downward since July last year, are recently seeking a rebound, this raises expectations for the top market capitalization stocks." The analysis suggests that rebound buying is expected mainly in stocks with high earnings improvement expectations.

Han Ji-young, a researcher at Kiwoom Securities, also said, "The domestic stock market is expected to rebound, supported by the improvement in Chinese industrial indicators and the rise in European stock markets, amid the perception that the recent sharp decline below the 2900 level was excessive," but added, "However, tightening and the LG Energy Solution IPO issue are expected to limit the index's upside."

She added, "However, pre-listing supply-demand risks seem to have been somewhat alleviated due to the end of institutional investors' demand forecasting and the end of existing stock sales by individual investors to raise subscription funds (D+2 settlement, public subscription on the 18th-19th)." She advised, "Since competition for securing shares by passive and active funds such as domestic and international benchmark indices and secondary battery theme indices will continue after listing, it is appropriate to respond by sector and stock groups while monitoring Q4 earnings results rather than focusing solely on the index for the time being."

At this time, individual investors are the only net sellers. They are net selling about 79.6 billion KRW and 24.3 billion KRW in the KOSPI and KOSDAQ markets, respectively. Foreign investors are net selling about 33.4 billion KRW in the KOSPI market but net buying about 1.4 billion KRW in the KOSDAQ market. Institutions are solely net buyers, purchasing about 114.2 billion KRW and 20.7 billion KRW in both markets, respectively.

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