[Weekly Market Review] "Climbed the Bull Market Fearing Becoming a 'Byeorakgeoji'... Was It Time to Switch to Inverse?"

KOSPI Ends Second Week of January with Over 5% Drop
Individuals Bought 11 Trillion Won Worth This Year, Half in Samsung Electronics

All Stocks Bought by Individuals Declined
Samsung Electronics Down 3%, Hyundai Motor 10%, Celltrion 13% in One Week

[Asia Economy Reporter Oh Ju-yeon] In the second week of January (11th to 15th), the domestic stock market initially continued its bullish trend, reaching an all-time high of 3266.23 during trading on the 11th, suggesting a sustained upward momentum. However, with volatility close to 150 points in a single day, the weekly market ultimately closed lower.

According to the Korea Exchange on the 16th, the KOSPI closed at 3085.90, down 2.03% from the previous trading day, falling below the 3100 mark. Although the KOSPI reached an all-time high intraday on Monday the 11th, the upward momentum slowed, peaking on the rise curve before reversing direction. The decline from the weekly intraday high was as much as 5.52%.

[Image source=Yonhap News]

Since last week, the securities industry has warned about the overheating of the rapidly rising stock market. Even those who had predicted a bullish market for the year mentioned the high possibility of a short-term market correction and emphasized the need for investment strategies to prepare for it.

However, since November last year, the KOSPI surged nearly 1000 points from 2300 to 3200 in the blink of an eye, causing a term called 'Byeorakgeoji' to spread among individual investors, reflecting growing anxiety that they must start investing in stocks immediately.

The term 'Byeorakgeoji' originally came from real estate, used sarcastically to describe people who, despite normal economic activities, suddenly became destitute due to soaring housing prices.

The use of this term in the securities market emerged because the index rose from the 1400s to 2000 after the COVID-19 outbreak in March last year, and then surged again from 2300 to 3200 in the past three months. During this period, individuals who were excluded from the rising market felt they had 'missed the opportunity.' Those without stocks felt relative deprivation and rushed to open new accounts this year.

Due to this impatience and anxiety, individual investors who jumped into stocks this year have invested about 11 trillion KRW in the KOSPI market alone. Among these, Samsung Electronics was the most purchased stock.

Individuals bought 5.9 trillion KRW worth of Samsung Electronics shares this year, ranking first in net purchases. This was followed by Samsung Electronics preferred shares (1.187 trillion KRW), LG Electronics (622.3 billion KRW), Hyundai Mobis (579.7 billion KRW), Celltrion (576.7 billion KRW), Hyundai Motor (543.2 billion KRW), and SK Hynix (438.1 billion KRW).

In the second week of January alone, Samsung Electronics shares worth 3.85 trillion KRW were purchased. Next were Samsung Electronics preferred shares (830 billion KRW), Hyundai Motor (705 billion KRW), and SK Hynix (507 billion KRW).

However, these stocks, which rose early in the week, all closed lower, suggesting that latecomer individual investors are likely experiencing negative returns.

Samsung Electronics stock rose intraday to 96,800 KRW on the 11th but closed at 91,000 KRW that day and fell to 88,000 KRW on the 15th, a 3.30% drop. Hyundai Motor, whose stock surged earlier in the month due to rumors of collaboration with Apple, fell 10.28% from 267,500 KRW to 240,000 KRW during the same period. Considering it reached 289,000 KRW intraday on the 11th, this represents a 16.96% decline from the weekly high.

Most other stocks bought by individuals last week also fell on the 15th. Among them, Celltrion's stock movement was notable.

On the 13th, Celltrion announced Phase 2 clinical trial results for its self-developed COVID-19 antibody treatment 'Rekkironaju' (CT-P59). The results showed a 3.4-day reduction in clinical recovery time and a 54% decrease in the progression from mild to severe cases.

Despite these positive results, Celltrion's stock fell more than 10% over two trading days. Analysts attribute this to the expectations already being priced into the previously surged stock and a wave of profit-taking selling.

Celltrion's closing price dropped 13.76% from 381,500 KRW on the 13th to 329,000 KRW on the 15th. Celltrion Healthcare fell 15.55% from 169,800 KRW to 143,400 KRW, and Celltrion Pharm plunged 18.42% from 229,700 KRW to 187,400 KRW during the same period.

In contrast, the KODEX 200 Futures Inverse 2X Exchange-Traded Fund (ETF), which individuals held nearly 4 trillion KRW worth of last year, rose 4.91% from 2,035 KRW to 2,135 KRW.

The KODEX 200 Futures Inverse 2X is a product structured to profit when the index falls, which caused significant losses to investors during last year's rising market.

Although individuals had maintained a net buying stance on inverse products this year, they net sold about 18 billion KRW and 14 billion KRW on the 14th and 15th, respectively.