Retail buying approaches W100tr over 14 months as stocks face correction

South Korea’s retail investors have bought a combined net 99.2 trillion won ($88 billion) on the domestic stock markets since January 2020, Korea Exchange data showed Sunday, as the bourse faces a market correction on a surge in bond yield.

The figure is a combination of individuals’ net buying on the main board Kospi and the development board Kosdaq, both operated by the KRX, from January 2020 until February this year.

In the first two months of 2021, individual investors net purchased 35.4 trillion won worth of listed stocks.

This contrasted with the divestment of institutional investors over the cited period. Korea-domiciled institutions net sold 61.6 trillion won worth of listed stocks on Kospi and Kosdaq, while foreign institutions net sold 32.7 trillion won Korean stocks.

During the January-February period, Korean institutions net sold 25.6 trillion won stocks and foreign institutions net sold 8 trillion won shares.

Individuals’ appetite for equity investment grew stronger in 2021, as high liquidity and ultralow interest rates at home and abroad allowed them to amass dry powder and bet on listed stocks’ further growth and higher earnings.

The tech-savvy retail investors, locally dubbed “ant warriors,” were largely considered one of the drivers for post-COVID-19 pandemic recovery on the stock market after a major plunge due to the crisis last March.

Nearly four out of five were net purchased by retail investors on Kospi, home to blue-chip stocks such as tech giant Samsung Electronics and SK hynix, carmaker Hyundai Motor and internet companies Naver and Kakao.

The favorite stock among Koreans was Samsung Electronics for the past 14 months. They net bought 31.3 trillion won in Samsung Electronics common shares and preferred shares combined. This was followed by Hyundai Motor and its affiliates Kia and Hyundai Mobis, as well as Naver, SK hynix and Kakao.

Meanwhile, Korean equities recently affected by US inflation woes and a surge of US Treasury bond yield, put a cap on their growth. On Friday, Kospi fell 2.8 percent, while Kosdaq slid 2.4 percent.

By Son Ji-hyoung (consnow@heraldcorp.com)