NIO, AT&T, Qualcomm, Nikola, etc.
Top Overseas Stocks by Net Buying
Hanwha Solutions, CS Wind, etc.
Eco-Friendly Stocks Strong in Domestic Market
[Asia Economy Reporters Oh Ju-yeon and Lee Min-ji] Domestic investors have been focusing their investments on U.S. growth stocks in overseas markets ahead of the U.S. presidential election. In contrast, in the domestic stock market, attention is being paid to eco-friendly and renewable energy-related stocks linked to the Green New Deal.
According to the Securities Information System SaveRO of the Korea Securities Depository on the 3rd, NIO, known as the Tesla of China, appeared for the first time among the top overseas stocks net purchased by domestic investors in the past month. Although it did not make it into the top 50 the previous month, domestic investors bought NIO shares worth 39.4 billion KRW last month alone. As electric vehicle sales in the Chinese market showed solid growth, investors increased their purchase volume. The stock price jumped 44% in just one month, and securities firms expect further gains.
Summarizing the investment types of domestic investors last month, they can be categorized as electric vehicles, 5G, and eco-friendly sectors. Investors who had been focusing on overseas companies related to semiconductors, healthcare, and new materials in the second half of this year appear to have shifted their attention to next-generation growth industries.
Regarding 5G technology, investors purchased media and telecommunications companies AT&T (39.1 billion KRW) and Qualcomm (34.9 billion KRW). Qualcomm, a telecommunications and semiconductor company, was recognized for its product competitiveness in the 5G smartphone market and attracted attention as a beneficiary stock. AT&T, the second-largest telecommunications company in the U.S., saw buying interest as the U.S. subscriber market, which had been sluggish due to COVID-19, began to recover. However, due to increased costs related to content production and weakness in the media sector, securities firms anticipate downward pressure.
Hydrogen truck company Nikola was also purchased with 26.4 billion KRW worth of shares. Although it once turned to net selling, the stock price dropped to around $18, about 77% lower than this year's closing high of $79.73, leading to low-price buying. Additionally, 25.5 billion KRW worth of shares in Velodyne Lidar, which possesses autonomous driving lidar technology, were acquired. Payment service platform company Square was also net purchased with 27.2 billion KRW.
Investments through exchange-traded funds (ETFs) were also active. The most purchased ETF was the ARK Innovation ETF, bought with 38 billion KRW. Regarding eco-friendly sectors, the 'ISHARES Global Clean Energy ETF' was net purchased with 28.7 billion KRW. Interest expanded as U.S. Democratic presidential candidate Joe Biden pledged a Green New Deal investment of 2,400 trillion KRW as part of his election promises.
In particular, eco-friendly sectors reflected high expectations in the domestic stock market as well. According to the Korea Exchange, on the first trading day of November, the 2nd, eco-friendly and renewable energy-related stocks showed strength. These sectors are expected to grow not only as beneficiaries of Biden in the U.S. presidential election but also because starting next year, Korea's New Deal project will enter a new growth phase through institutional improvements and fiscal and private investments.
Hanwha Solutions, which closed at 43,700 KRW on the 30th of last month, surged more than 6% on the first trading day of November to 46,750 KRW. OCI also rose 4.85% from 61,800 KRW on the 30th to 64,800 KRW on the 2nd. CS Wind, a specialized manufacturer of wind power towers, had a stock price of 42,000 KRW until early July but rose to the 140,000 KRW range in early September. After the policy momentum faded, it dropped to the 90,000 KRW range at the end of October but closed at 106,500 KRW on the 2nd. LS and LS ELECTRIC saw their stock prices rise 3.67% and 1.01%, respectively, compared to the 30th of last month, as offshore wind growth potential was highlighted. Shinsegi ENG, Willings, and Hyundai Energy Solutions also rose 2.51%, 7.00%, and 4.87%, respectively.
Eco-friendly and renewable energy-related stocks may experience temporary fluctuations depending on the U.S. presidential election results, but the domestic Green New Deal project momentum is stronger, making this a sector to watch long-term. Especially in the 'stepping stone preparation period' of next year and 2022, a total of 72.4 trillion KRW is planned to be invested in the Green New Deal, aiming to create 659,000 jobs. This investment scale is significantly larger than that of the Digital New Deal (58.2 trillion KRW) and safety net reinforcement (28.4 trillion KRW). Seochung-woo, a researcher at SK Securities, said, "Even after the U.S. presidential election ends, Korea's New Deal project will execute funds totaling 114 trillion KRW over five years until 2025, so it is not a simple theme or one-off issue stock, and there are ample opportunities for additional profits."
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