KOSPI Weakens to '2990 Level' with Foreign and Institutional Selling... Financial Stocks Plunge Due to Ex-Dividend Date Impact

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] On the 29th, the KOSPI showed a more limited decline than the securities industry's forecast of a 1% range drop due to the ex-dividend day effect. The Korea Exchange estimated that if this year's cash dividends remain the same as last year, the KOSPI's cash dividend adjustment index for this year would be 2,978.21, which is 42.03 points (1.39%) lower than the closing price of 3,020.24 on the day before the ex-dividend day, the 28th. However, major dividend stocks such as insurance, banking, and securities saw significant declines.

As of 10:23 a.m. on the day, the KOSPI was at 3,002.82, down 17.42 points (-0.58%) from the previous day. The index opened at 3,002.90, down 17.34 points (0.57%) from the previous session. Early in the session, it even fell to 2,993.36 at one point.

By investor type, individual investors defended the index with net purchases of 1.1067 trillion KRW. Foreigners and institutions were net sellers with 137.2 billion KRW and 996.2 billion KRW, respectively.

Among the top market capitalization stocks, movements were mixed. Samsung Electronics (-1.12%), NAVER (-0.13%), and LG Chem (-0.47%) declined.

In particular, the ex-dividend effect was prominent in the decline of financial stocks. NH Investment & Securities (-6.62%), Daishin Securities (-8.02%), Samsung Fire & Marine Insurance (-6.76%), DB Insurance (-6.77%), and Industrial Bank of Korea (-5.41%) showed large drops. On the other hand, Samsung Biologics (0.56%), Kakao (1.32%), and Hyundai Motor (0.23%) rose.

At the same time, the KOSDAQ was at 1,027.86, up 0.42 points (0.04%) from the previous day. The index opened at 1,028.46, up 1.02 points (0.10%) from the previous session.

By investor type, similar to the KOSPI, individual investors were net buyers with 630.4 billion KRW. Foreigners and institutions were net sellers with 328.5 billion KRW and 310.3 billion KRW, respectively.

Among the top 10 market capitalization stocks, Celltrion Healthcare (-5.76%), EcoPro BM (-2.63%), Pearl Abyss (-2.36%), and L&F (-0.98%) declined. Meanwhile, Wemade (0.76%) and HL Biopharma (4.75%) rose.

Seojeonghoon, a researcher at Samsung Securities, said, "Even considering about a 40-point drop in the KOSPI today, it can be seen as stable," adding, "Considering that the price burden is still low, buying responses throughout the year-end are valid."

There are also concerns that volatility in the domestic stock market will inevitably increase for the time being. Lee Kyungmin, a researcher at Daishin Securities, said, "Institutional program buying and foreign buying that supported the KOSPI's rebound attempt in December could come back as a boomerang after the ex-dividend day," adding, "Looking at past program trading patterns, program buying inflows in December have mostly been liquidated in January and February of the following year, so there is a possibility of increased selling pressure from foreigners and institutions after the ex-dividend day."