Foreigners Watching Kosdaq Sell-off Scoop Up 200 Billion Won Worth

From the 4th to the 9th, 900 billion KRW net selling in the KOSPI market contrasted with focused buying of JYP Entertainment, EcoPro BM, BHI, and others
Stocks with high rebound potential after the impeachment political crisis 'show signs of interest'

Amid foreign investors continuously reducing their domestic stock holdings following the '12·3 Emergency Martial Law Incident,' the KOSDAQ market has attracted attention for showing a buying preference and net buying trend. Foreign investors recorded a net purchase of 200 billion KRW in the KOSDAQ market over four days from the 4th to the 9th. This contrasts with a selling preference of 900 billion KRW in the KOSPI market during the same period. In particular, examining the buying trend suggests that foreign investors engaged in bargain hunting mainly in KOSDAQ-listed companies with high rebound potential once political turmoil subsides and the domestic stock market stabilizes.

According to the financial investment industry on the 10th, foreign investors showed a selling preference in the KOSDAQ market immediately after the martial law incident on the 4th and 5th but started bargain buying from the 6th. Notably, on the 9th, they recorded net purchases exceeding 200 billion KRW. On that day, a sell-off led mainly by individual investors caused the KOSDAQ index to plunge more than 5%. This is interpreted as foreign investors stepping in to buy at low prices.

Over the recent four trading days, foreign investors purchased shares of JYP Entertainment, EcoPro, EcoPro BM, and BHI.

The stock price of JYP Entertainment fell 10.9% during this period. Despite strong expectations for improved earnings next year, the stock price declined due to external factors, presenting a buying opportunity. Investment sentiment was dampened amid the impeachment issue, compounded by litigation risks raised by a member of the multinational girl group 'VCHA.' JYP Entertainment stated, "We deeply regret the unilateral disclosure of false and exaggerated information to the outside and the choice of litigation as a method," adding, "We plan to take all necessary measures to prevent further damage." Since this is not considered a factor that would affect existing earnings forecasts, the stock is regarded as having high rebound potential once the stock market stabilizes. Hyunyong Kim, a researcher at Hyundai Motor Securities, analyzed, "JYP Entertainment's expected concert attendance next year is 3.3 million, a 48% increase from this year," and "Expected album sales are 16 million, up 21% from this year, exceeding the market growth rate of 8%."

EcoPro and EcoPro BM have relatively outperformed the KOSDAQ index during the impeachment political turmoil. While the index dropped 9.2%, EcoPro and EcoPro BM fell by 5.0% and 6.7%, respectively. This is interpreted as their continuous downward trend this year limiting further declines.

BHI, which foreign investors purchased shares worth 14.2 billion KRW, is considered a beneficiary stock of President-elect Donald Trump. Since the martial law incident, its stock price has fallen 10.9%. It rose sharply from early October to November 22 but declined along with the market plunge. If domestic political uncertainties decrease and expectations for benefits from Trump’s policies revive, a rebound is possible. President-elect Trump set a goal on his campaign website to invest in innovative Small Modular Reactors (SMR) and achieve record-high nuclear energy production during his term. Jaeyoon Han, a researcher at KB Securities, analyzed, "There is no reason why BHI, a leading supplier of auxiliary equipment for existing nuclear power plants, would not benefit from the SMR market opening," adding, "BHI is registered as an auxiliary equipment vendor for NuScale Power."

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