Institutions and Foreigners Included in 'Gobbus'...

On the 13th, dealers are working in the Hana Bank dealing room in Euljiro, Seoul, where the KOSPI index showed an early morning upward trend. The index started at 3,253.24, up 6.77 points (0.21%). Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] Institutions and foreigners have jumped on the Gopbus (KODEX200 200 Futures Inverse 2×).

According to Yuanta Securities on the 27th, the top stock in net purchases by institutions on the 26th was Gopbus. They net purchased 39.08 billion KRW. Institutions also bought about 8.76 billion KRW worth of KODEX Inverse, betting on a market decline. The Inverse product generates profits in the opposite direction when the KOSPI 200 falls. Gopbus has a similar structure but yields twice the profit on the decline. Typically, when institutions and foreigners expect the market to fall, they hold Inverse or Gopbus.

Institutions sold off the leveraged products they had accumulated. The top stock in net sales by institutions that day was KODEX Leverage, with net sales amounting to 64.1 billion KRW. Leverage products generate profits in the market’s upward direction.

Foreigners also bought Gopbus along with institutions. Gopbus was among the top 10 stocks they held. The net purchase amount reached 11.06 billion KRW. The spread of the Delta variant, Chinese government regulations, and instability in US-China relations causing declines in Asian markets are analyzed as reasons for the weakened investor sentiment.

Due to this decline in investor sentiment, most of the top market capitalization stocks showed weakness the previous day. Samsung Electronics (-0.63%), SK Hynix (-1.27%), Kakao (-1.34%), Samsung Electronics Preferred (-0.27%), LG Chem (-1.33%), Samsung SDI (-1.86%), Hyundai Motor (-0.44%), among others.

However, whether investments by institutions and foreigners will yield immediate profits is uncertain. The market started higher that day. As of 9:46 AM, the KOSPI was up 19.50 points (0.60%) at 3,244.45.

Sangyoung Seo, a researcher at Mirae Asset Securities, said, "Although the Chinese market experienced a large drop, it is important to note that some stocks in electric vehicles, solar power, and semiconductors showed a steady trend." Ji-young Han, a researcher at Kiwoom Securities, predicted, "The shock from the sharp drop in the Greater China markets the previous day was related to regulations on education and the music industry, so the impact on the domestic market will be limited. Considering the strong performance of the US market today, the domestic market is expected to show a rebound."