Foreign Retail Investors Filled Their May Portfolios with 'Tech Stocks'

Last Month's Top 10 Overseas Stock Net Purchases Dominated by 9 Stocks
Tesla, Apple, Netflix, etc... Inflow of Bargain Buying Amid Decline

[Asia Economy Reporter Lee Myunghwan] Domestic "Seohak Gaemi" (Korean investors investing in U.S. stocks) showed a strong investment sentiment toward technology stocks listed on the U.S. stock market last month. It is interpreted that bargain hunting occurred as these stocks underwent price adjustments in May.

On the 7th, Asia Economy analyzed data from the Korea Securities Depository's securities information portal SEIBro and found that among the top 10 net purchased overseas stocks in May, nine were technology stocks or exchange-traded products (ETPs) tracking related indices.

Tesla ranked as the top net purchased stock. Domestic investors net bought about $1.035 billion (approximately 1.3 trillion KRW) worth of Tesla shares in May. Following closely was the 'Proshares Ultrapro QQQ (TQQQ),' an exchange-traded fund (ETF) that tracks the Nasdaq 100 index, which is composed mainly of technology stocks, with triple leverage. Other technology stocks such as Apple (3rd), IonQ (5th), Nvidia (9th), and technology-related ETPs like SOXL (4th), FNGU (6th), and QLD (8th) also ranked high.

It is estimated that bargain hunting surged as technology stocks continued to decline in the U.S. stock market in May. Netflix saw its subscriber count decrease for the first time in 10 years last month, causing its stock price to fall nearly 70% from its peak, and video-based social media company Snap dropped 40% in a single day due to poor earnings. Most of the top 10 net purchased stocks by Seohak Gaemi also experienced price declines. Quantum computing startup IonQ fell the most, down 26.84% in May. Tesla (-16.02%), FNGU (-19.76%), and TQQQ (-13.59%) also dropped more than 10%. The average price change rate of the top 10 net purchased stocks in May was -9.64%.

The rebound seems difficult for the time being. KB Securities researcher Kim Ilhyuk said, "Individual investors who mainly bought technology stocks are sticking to a bargain hunting strategy but tend to sell off when bad news comes out, which is also having an impact," adding, "There is increasing analysis that a capitulation sell-off needs to occur to lay the foundation for a rebound."

Even in the second half of the year, the outlook will vary by sector. NH Investment & Securities researcher Lim Jiyong advised, "The challenging investment environment for technology stocks will continue, causing disparities among detailed sectors," and recommended "cloud, cybersecurity, and online travel agencies (OTA) as preferred sectors due to their high exposure to business-to-business (B2B) and benefits from reopening (resumption of economic activities)." On the other hand, he added, "Advertising, e-commerce, social networking services (SNS), media, and fintech sectors are judged to be sectors to avoid temporarily in the second half."

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