"Big Rebound Comes After Fear"... Ants Are 'Jumjum'

On the 'Day of Full-Scale War Declaration',
Individual Investors Bought Over 1 Trillion Won
Focused on Blue-Chip Stocks like Samsung Electronics
Contrasting with Foreign and Institutional Selling Pressure

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jaehee] Amid escalating war tensions between Russia and Ukraine, individual investors have emerged as major players in the Korean stock market. On the 24th, when Russia declared full-scale war on Ukraine, individual investors scooped up over 1 trillion won in a single day, seizing the fear-driven opportunity to buy at low prices.

According to the Korea Exchange on the 25th, the KOSPI index closed at 2,648.80, down 2.50% (70.73 points) from the previous trading day. Foreigners and institutions sold a net 687.2 billion won and 485.6 billion won respectively, dragging the index down. Notably, foreigners had maintained a net buying streak for five consecutive trading days since the 18th as tensions between Russia and Ukraine escalated.

In contrast, individual investors viewed the growing fear as an opportunity for bargain hunting and dollar-cost averaging (lowering the average purchase price through additional buying), continuing net buying for five consecutive trading days. Starting with 43.5 billion won on the 18th, they steadily purchased 126.5 billion won on the 21st, 685.2 billion won on the 22nd, and 111.6 billion won on the 23rd. On the 24th, when tensions between Russia and Ukraine peaked, they bought 1.1121 trillion won worth of stocks. On that day, foreigners and institutions sold as much as individual investors bought.

The pattern of foreigners selling and individuals buying during geopolitical crises has been repeated. Especially, individual investors who have experienced significant market rebounds after crises such as the COVID-19 pandemic have engaged in focused buying.

Individual investors mainly purchased blue-chip stocks. It was identified that they bought Samsung Electronics worth 345.7 billion won, SK Hynix 171 billion won, Hyundai Motor 110.2 billion won, Kia 96.8 billion won, Samsung SDI 72.4 billion won, LG Chem 66.5 billion won, and LG Energy Solution 61.8 billion won in that order. Since stock prices fell due to macroeconomic factors rather than individual company fundamentals, it is interpreted that they selected stocks expected to rise when the market rebounds.

In the securities industry, cautious buying recommendations are emerging as risks have already been priced in, but unlike in the past, concerns about economic contraction and interest rate hikes combined with geopolitical risks suggest that premature buying should be avoided.

Han Ji-young, a researcher at Kiwoom Securities, said, "Although uncertainty due to war is increasing, since much of the risk has already been priced in, it is appropriate to watch or respond with buying rather than selling."

Seo Sang-young, director at Mirae Asset Securities, analyzed, "If the situation prolongs, inflation due to rising grain prices and expanded global uncertainty are expected."

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