[Donghak Ant One Month] Most Ant Investors in Blue-Chip Stocks Smiled

Highest Profit Codex Leverage 17%... Samsung Electronics Also About 5% Profit
Crude Oil and Inverse Related Products Plunge... Losses Exceed 20%

[Asia Economy Reporter Minwoo Lee] Individual investors, so-called 'Donghak Ants,' who jumped into blue-chip stocks like Samsung Electronics during last month's market crash, have entered the profit zone. Following the KOSPI index reclaiming the 1900 level on the 17th after a month, it hovered above 1920 on the morning of the 20th, suggesting that the ants' investment sentiment is likely to continue.

According to the Korea Exchange and NH Investment & Securities, the stock most purchased by individuals since the market crash on the 5th of last month is Samsung Electronics. As of 9:30 a.m. that day, the total net purchase amount was 4.4358 trillion KRW. This accounts for 57% of the total net purchase amount of 7.6828 trillion KRW for this year within just over a month. The average purchase price during this period is estimated at 48,480 KRW. Considering that Samsung Electronics' stock price was 50,900 KRW as of 9:30 a.m. that day, investors have already made about a 5% profit. The profit rate significantly increased as the stock price rose about 4.9% in one day compared to the closing price of 49,000 KRW on the 16th.

Samsung Electronics' stock price, which had risen to the 62,000 KRW range at the beginning of the year, recorded 58,000 KRW on the 5th of last month and then began to decline sharply from the 6th. This was the time when global stock markets fell together due to concerns about an economic slowdown caused by the novel coronavirus disease (COVID-19). After the World Health Organization (WHO) declared COVID-19 a pandemic on the 11th, the stock price dropped to the 40,000 KRW range. On the 19th of the same month, it hit a three-month low of 42,300 KRW. This was the day the KOSPI index fell to the 1400 level for the first time in over ten years since 2009. On that day, individual investors' net purchase amount was 178.8 billion KRW, and the average purchase price was 43,967 KRW. The current stock price of 50,900 KRW has already risen 15.8% compared to then.

Other stocks heavily purchased by individuals during this period include KODEX 200 Futures Inverse 2X (1.6658 trillion KRW), KODEX WTI Crude Oil Futures (H) (1.0525 trillion KRW), KODEX Leverage (857.7 billion KRW), Hyundai Motor (722.4 billion KRW), Samsung Electronics Preferred Shares (650.4 billion KRW), and SK Hynix (629.5 billion KRW). Except for KODEX 200 Futures Inverse 2X and KODEX WTI Crude Oil Futures (H), all stocks yielded profits compared to their average purchase prices. KODEX Leverage had the highest return at 17.9%, followed by Hyundai Motor (14.7%), Samsung Electronics Preferred Shares (6.6%), and SK Hynix (2.6%). On the other hand, KODEX 200 Futures Inverse 2X, which gains when the KOSPI index falls, had an average purchase price of 8,649 KRW but was priced at only 6,810 KRW as of 9:30 a.m. that day, resulting in a 21.3% loss. KODEX WTI Crude Oil Futures (H), which tracks West Texas Intermediate (WTI) crude oil prices, also had a return rate of -18.7%.

Excluding relatively speculative leveraged products, all are blue-chip stocks, so the analysis is that profits were made as a rising market appeared. The KOSPI index already surpassed the 1900 level on the 17th after a month, entering a bullish market. However, there are concerns that speculative funds, not 'smart money' that flows in based on corporate fundamentals, are also entering, which could increase overall market volatility.

Researcher Hainhwan from Meritz Securities said, "Not only oil-related ETFs and ETNs but also inverse ETFs have been among the top net purchases since mid-last month. Such funds may not be 'smart money' but speculative capital aiming for short-term price gains. This means that the nature of individual funds, which had been regarded as the basis for market rises for some time, can now also be a basis for increased volatility."