These Days, Everyone Lives According to Their Own Preferences
Individual Stock Purchases Surge Early This Year
Foreigners and Institutions Overwhelmed
Samsung Electronics, LG Electronics Net Buying
[Asia Economy Reporter Oh Ju-yeon] Retail investors, who had long borne the stigma of being ‘always losing’ and ‘the end of the line when ants buy’ due to being outpaced by foreigners and institutional investors, have changed. In the market driven by individuals last year, retail investors succeeded in buying low the stocks sold off by foreigners and institutions and making profits, to the extent that recently there has been talk of ‘following the individuals’ when investing. Earlier this year, stock prices surged mainly in large-cap stocks bought by individuals, overwhelming foreigners and institutions.
According to the Korea Exchange on the 11th, among the top 10 stocks that individuals net bought at the end of December last year, 8 stocks rose this month, generating profits. Unlike foreigners and institutions who focused on selling to realize gains and adjust their holdings ahead of the year-end from December 28 to 30 last year, individuals net purchased 760 billion KRW worth of stocks. The most purchased stock was Samsung Electronics, with 628.3 billion KRW bought, followed by Samsung Electronics preferred shares with 384 billion KRW, ranking first and second in net purchases.
During this period, the average purchase price for individuals was 79,000 KRW. However, on that day, Samsung Electronics’ stock price broke through 96,000 KRW during the morning session, briefly surpassing the ‘80,000 KRW mark,’ yielding over 20% profit in just over two weeks. Samsung Electronics preferred shares also rose 7.84% to 83,900 KRW during the session, allowing individuals who bought at around 73,000 KRW to earn a 15% profit.
On the other hand, foreigners sold 467.9 billion KRW worth of Samsung Electronics shares and 189.6 billion KRW worth of Samsung Electronics preferred shares during this period, ranking first and second in net sales. Institutions also ranked first and second in net sales with Samsung Electronics preferred shares (197 billion KRW) and Samsung Electronics (194.7 billion KRW), respectively, losing the profitability battle on Samsung Electronics to individuals.
Retail investors are also smiling broadly with the top purchased stocks excluding Samsung Electronics. Individuals net bought SK Hynix, Daelim Industrial, KT&G, KB Financial Group, LG Electronics preferred shares, Samsung Fire & Marine Insurance, and Hana Financial Group, among which all except Daelim Industrial and KT&G have risen this year. Financial stocks and preferred shares, which had fallen due to ex-dividend dates, also rose, allowing individuals who picked them up at low points to achieve double-digit returns from the beginning of the year.
SK Hynix, ranked fifth in net purchases, rose 15.61% from 118,500 KRW on the 30th of last month to 137,000 KRW, while KB Financial Group and Hana Financial Group also increased by 6.91% and 11.16%, respectively.
Breaking the formula of ‘stocks fall when individuals buy,’ individuals have literally earned profits in ‘eight or nine out of ten’ cases, raising interest recently in which stocks individuals are accumulating.
Samsung Electronics remains the top favorite stock for individuals this year as well. From the 4th to the 11th, individuals net bought 2.0539 trillion KRW worth of Samsung Electronics, ranking first in net purchases. The growth momentum for Samsung Electronics this year lies in semiconductors. From the first quarter, DRAM prices are expected to rise along with increased demand, and growth in the foundry segment within semiconductors is also expected to accelerate. After the announcement of the fourth-quarter results last year, securities firms have all raised their target prices. Mirae Asset Daewoo set it at 113,000 KRW, Hana Financial Investment and Eugene Investment & Securities at 110,000 KRW. Do Hyun-woo, a researcher at NH Investment & Securities, raised the target price to 110,000 KRW, noting that “Samsung Electronics’ price-to-earnings ratio (PER) based on 2021 is 15 times, undervalued compared to global competitors.”
Following that, individuals swept up LG Electronics (522.5 billion KRW), SK Biopharm (381.3 billion KRW), and Samsung Electronics preferred shares (357.1 billion KRW) among the top net purchased stocks.
On the other hand, in exchange-traded funds (ETFs), individuals mostly bought inverse products that profit when the index falls. Individuals holding inverse ETFs worth about 4 trillion KRW last year have continued to steadily increase inverse purchases this year. Since the beginning of the year, individuals have poured 212.8 billion KRW into KODEX 200 Futures Inverse 2X. Including KODEX Inverse (165.4 billion KRW), they have bought over 378 billion KRW. This exceeds the combined purchase scale of other ETFs such as TIGER KRX Secondary Battery K-New Deal (194 billion KRW) and KODEX Secondary Battery Industry (161.1 billion KRW) by more than 20 billion KRW.
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