[Asia Economy Reporter Lee Seon-ae] Individual investors are wearing a gloomy expression over their poor stock investment performance. Their concerns are growing as the market enters the September period of negative earnings, where both stock prices and corporate profits decline simultaneously.
According to the Korea Exchange on the 12th, the net purchase amount of domestic stocks by individual investors reached 30.9 trillion KRW (22.6 trillion KRW in the KOSPI market and 8.3 trillion KRW in the KOSDAQ market) as of the 8th since the beginning of the year. The stock that received the most affection from retail investors is Samsung Electronics. Since the start of the year, individual investors have net purchased common shares of Samsung Electronics worth 17.366 trillion KRW and preferred shares worth 1.6907 trillion KRW. Individuals also net purchased Naver and Kakao stocks worth 2.3395 trillion KRW and 1.84 trillion KRW, respectively.
Other top stocks in terms of net purchases by individuals include SK Hynix (1.3807 trillion KRW), KakaoBank (1.044 trillion KRW), Samsung Electro-Mechanics (1.036 trillion KRW), Doosan Enerbility (960.1 billion KRW), and LG Electronics (821.3 billion KRW).
However, with the U.S. Federal Reserve's interest rate hikes, global economic recession, and concerns over the slowdown in domestic corporate profits, the KOSPI has fallen to the 2300 level, resulting in poor investment performance for individual investors.
The average purchase price per share for Samsung Electronics by individuals (net purchase amount/net purchase quantity) is 65,937 KRW. Based on the closing price of 55,600 KRW on the 8th, this represents a loss of about 16%. Due to the tightening monetary policy, the investment performance in growth stocks is at a dismal level.
This year, individuals bought Naver and Kakao at average prices of 303,494 KRW and 90,715 KRW, respectively, but their stock prices have dropped to 231,500 KRW and 68,000 KRW. Naver is down 24%, and Kakao is down 25%.
The average purchase price for KakaoBank by individuals is 37,167 KRW, but as of the 8th, the stock price has plummeted to 25,000 KRW, resulting in a loss of 33%.
Additionally, the top nine stocks in terms of net purchases by individuals, including Samsung Electronics preferred shares (-7%), SK Hynix (-5%), Samsung Electro-Mechanics (-13%), Doosan Enerbility (-10%), and LG Electronics (-15%), all recorded negative average returns.
Experts advise selective investment in stocks with high profit growth potential, as the outlook for domestic corporate profits is weakening amid overlapping adverse factors such as global tightening trends, high inflation, and economic slowdown.
Lee Jeong-yeon, a researcher at Meritz Securities, said, "Both developed and emerging countries are experiencing a sharp decline in profit forecasts for next year compared to this year. Typically, the price-to-earnings ratio (PER) is sensitive to profit growth rates, so despite the low PERs of global countries, it is not advisable to hastily judge this as a buying opportunity."
He added, "In a situation where overall corporate profit forecasts are declining, stocks with improving earnings momentum next year and high growth rates next year have an advantage."
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