[Weekly Market Review] KOSPI Fluctuates Between 2110 and 2170... Individuals Favor 'Inverse' vs Institutions Prefer 'Leverage'

June Fourth Week, Fluctuations Within a Range Due to COVID-19
Individuals Net Buy Over 2 Trillion Won
SK Tops Net Buys on SK Biopharm Optimism
Among ETFs, Inverse Chosen, Institutions Buy Leverage

[Asia Economy Reporter Oh Ju-yeon] In the fourth week of June (22nd to 26th), the domestic stock market showed a box range between 2110 and 2170 points, as concerns over the resurgence of COVID-19 and the resulting delay in economic recovery came to the forefront. Although there were no sharp corrections or rises, the market saw a pattern where the index rose one day and fell the next, then rebounded the following day, with stock-specific movements standing out more than the index itself. The driving force behind this market was undoubtedly individual investors.

On the 17th, the KOSPI index opened at 2,133.18, down 4.87 points (0.23%) from the previous trading day, fluctuating around the flat line as dealers worked in the Hana Bank dealing room in Euljiro, Seoul. Photo by Mo Honam munonam@

According to the Korea Exchange on the 27th, in the fourth week of June, individual investors bought stocks worth 2.2 trillion won in the KOSPI market, while institutions sold stocks worth 2 trillion won. When the KOSPI fell by over 2% to 2112.37, it was individual investors who defended the market. On that day alone, individuals purchased stocks worth 1.3 trillion won.

The stock most purchased by individuals was SK, with net buying of 295 billion won during this period. This is interpreted as the enthusiasm and investment sentiment for SK Biopharm, a subsidiary scheduled to be listed on the KOSPI next month, extending to its holding company SK.

SK Biopharm, scheduled to be listed on the KOSPI on July 2nd, completed its general subscription on June 23-24, setting a record-breaking milestone. The total subscription deposit reached 30.9899 trillion won, breaking the previous record. The previous highest was 30.0649 trillion won set by Cheil Industries in 2014. The subscription competition rate also recorded 323.02 to 1, significantly surpassing Cheil Industries' 194.9 to 1.

Following SK, individual investors evenly purchased NAVER, LG Chem, Samsung Electronics Preferred, and Korea Electric Power Corporation.

Among exchange-traded funds (ETFs), individuals focused on the index decline by net buying KODEX 200 Futures Inverse 2X worth 65 billion won.

Foreign investors ranked Samsung Electronics, SK, and SK Hynix as their top three net purchases. They bought Samsung Electronics worth 258 billion won, SK worth 138.6 billion won, and SK Hynix worth 124 billion won. Unlike individuals who bought inverse ETFs, foreigners purchased KODEX 200 worth 96 billion won.

Institutions, which consistently sold throughout the week, also included KODEX WTI Crude Oil Futures (H) and KODEX Leverage among their top net purchases, with amounts of 100.6 billion won and 84.3 billion won respectively.

The KOSDAQ index also saw bets on a rise, with institutions buying KODEX KOSDAQ150 Leverage worth 58 billion won. Among stocks, SK Innovation was purchased worth 70.5 billion won.

The securities industry expects that selling pressure from investors due to the resurgence of COVID-19 and economic activity contraction may continue for some time, but the possibility of a sharp drop like in March is low due to liquidity support. In particular, stocks with future growth potential are expected to maintain their strength.

Han Dae-hoon, a researcher at SK Securities, said, "Concerns about COVID-19 will inevitably continue unless vaccines or treatments are developed," adding, "While concerns about the economy and corporate earnings remain, the market quickly rebounded thanks to liquidity, so it is true that we have entered a price range with high burden." However, noting that subscription deposits for SK Biopharm approached 31 trillion won, he mentioned that liquidity is abundant in the market and predicted, "The concentration phenomenon will intensify further in the current situation, and the strength of existing leading stocks and sectors with expected future growth is likely to continue."