Foreigners Focus on Hyundai Motor... Net Purchase of 83.7 Billion Won on the 17th
Individuals Accumulate Battery Stocks like LG Chem and SK Innovation... Sell Off Hyundai Motor
"Electric Vehicle Market Growth Gauge... Individuals Approach from a More Macroscopic Perspective"
[Asia Economy Reporter Minwoo Lee] Foreign and individual investors have shown contrasting responses to the government's 'Green New Deal' policy, which includes plans to foster hydrogen and electric vehicles. While foreigners concentrated on individual car manufacturers, individuals invested in companies that manufacture batteries, the core components of electric vehicles. This is seen as individual investors taking a more long-term and value-oriented approach to the market.
According to the Korea Exchange on the 20th, foreigners net purchased Hyundai Motor Company shares worth 118 billion KRW from the 14th to the 17th, following the government's announcement of the Green New Deal policy promoting the hydrogen and electric vehicle industry. The only stock foreigners bought more than Hyundai during this period was Samsung Electronics, with 489.8 billion KRW. On the 17th alone, foreigners purchased Hyundai shares worth 83.7 billion KRW, marking the largest single-day net purchase this year.
The stock price is also on the rise. As of 9:54 AM that day, it was trading at 122,500 KRW, up 4.26% from the previous close. This represents a 20.6% increase compared to the closing price on the 14th. Compared to March 20th, when the COVID-19 panic peaked and the price was 65,000 KRW, it has nearly doubled. Alongside this, foreigners also focused on accumulating Kia Motors shares, purchasing 33.3 billion KRW worth over five consecutive trading days from the 13th to the 17th. This is the longest consecutive net buying streak this year.
This is likely because Hyundai and Kia are expected to record profits despite the global automotive industry's downturn, coupled with anticipated policy benefits. According to financial information provider FnGuide, Hyundai's Q2 market consensus forecasts sales of 20.8889 trillion KRW and operating profit of 306.2 billion KRW. Kia is also expected to achieve sales of 11.6207 trillion KRW and operating profit of 75.8 billion KRW. Although these figures are lower than Q2 last year, they are considered solid compared to most overseas automakers, which are expected to post operating losses. Daimler announced on the 16th (local time) that it expects a Q2 operating loss of 1.68 billion euros (approximately 2.3117 trillion KRW). Ford, which posted a 2 billion USD (approximately 2.407 trillion KRW) loss in Q1, forecasted an even larger deficit in Q2.
On the other hand, individual investors focused more on battery stocks, the core components of electric vehicles, rather than car manufacturers. On the day the Green New Deal policy was announced, they net purchased LG Chem shares worth 87 billion KRW, the second-largest purchase this year. Net buying continued afterward, totaling 170.4 billion KRW from the 14th to the 17th, ranking third among individual net purchases. This contrasts with the 229.8 billion KRW net sale of Hyundai shares during the same period. Additionally, they bought battery-related stocks such as SK Innovation (41.4 billion KRW) and Cheonbo (12.8 billion KRW). A financial investment industry insider said, "Seeing Tesla's soaring performance in the US stock market recently, it seems individuals invested by gauging the overall growth potential of the electric vehicle market," adding, "Compared to foreigners who rely on company performance, individuals appear to have taken a more macro view of the industry and invested with a long-term perspective."
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