Review of the September Stock Market
Individual Investors Bought About 2 Trillion Won Amid Market Crash
Significant Losses in Samsung Electronics Purchases
Foreigners Focused on Leading Stocks and Thematic Buying
[Asia Economy Reporters Kwon Jaehee and Lee Myunghwan] In September, which recorded the worst market crash, a review of foreign investors' trading stocks revealed that they sold semiconductor stocks and bought secondary battery-related stocks. On the other hand, individual investors purchased nearly 2 trillion won worth of Samsung Electronics, and especially as short selling was concentrated on Samsung Electronics and other large-cap stocks, the scale of damage to individual investors was found to be greater.
On the 4th, Asia Economy analyzed the top net purchase stocks by investor type last month, and individual investors were found to have bought the KOSPI's leading stock, Samsung Electronics, the most. Individual investors net purchased 1.941 trillion won worth of Samsung Electronics, which accounts for 70.57% of their total net purchase amount. Besides Samsung Electronics, individuals also net purchased large growth stocks such as SK Hynix (3rd), Samsung Electronics Preferred (5th), Kakao (6th), and Naver (7th).
Since short selling was mainly concentrated on large-cap stocks, individual investors also seemed to suffer significant losses. Last month, the average daily short selling amount in the KOSPI market was 490.6 billion won, about 40% higher than the previous month (August). Particularly, the top three short sold stocks last month were Samsung Electronics (557.5 billion won), LG Energy Solution (534.4 billion won), and SK Hynix (358.5 billion won), indicating that individual investors who focused on buying large-cap stocks likely experienced greater losses. Notably, Samsung Electronics and SK Hynix repeatedly hit 52-week lows at the end of last month amid increased market volatility.
Kim Jungwon, a researcher at Hyundai Motor Securities, said, "During the market correction in September, the overall market short selling volume increased rapidly," adding, "Stocks with a high proportion of short selling are showing relatively weak prices, so special caution is needed when investing in top short sold stocks for the time being."
On the other hand, institutions and foreigners mainly net purchased stocks belonging to the ‘Taejo-Ibangwon’ theme (solar power, shipbuilding, secondary batteries, defense, nuclear power), which was the leading theme last month. For institutions, LG Energy Solution (2nd), L&F (4th), EcoPro BM (6th), and Samsung SDI (8th) had a large share among secondary battery stocks. Foreigners had seven out of their top 10 stocks belonging to the Taejo-Ibangwon theme. They mainly bought secondary battery and defense stocks such as Samsung SDI (1st), Hanwha Solutions (2nd), LG Energy Solution (4th), Hanwha Aerospace (6th), and LG Chem (7th).
It is estimated that institutions and foreigners concentrated their purchases on leading theme stocks that can partially defend against economic downturns. Last month, the domestic stock market experienced increased volatility due to a strong dollar and recession concerns, with major indices hitting new yearly lows and continuing to decline daily.
There is an analysis in the securities industry that a strategy centered on leading stocks will remain effective this month. Shin Seungjin, a researcher at Samsung Securities, diagnosed that an individual approach focusing on companies rather than sectors is necessary for the time being. He advised, "Although stock prices have fallen significantly, from this 3rd quarter earnings season, downward revisions of future earnings estimates due to recession concerns will intensify, making a V-shaped rebound difficult. Maintain a portfolio centered on secondary batteries and solar power, which benefit from the Inflation Reduction Act (IRA), automobiles with high valuation appeal relative to strong earnings, and financial and distribution sectors with relatively stable profits in volatile markets."
Han Jiyoung, a researcher at Kiwoom Securities, also said, "In times of uncertain future earnings prospects, it is necessary to focus on companies that at least provide visibility into upcoming quarterly earnings," and analyzed, "Defense stocks due to the possibility of escalation in Russia and military friction related to the Taiwan issue, and reopening stocks such as casinos and entertainment due to the full-scale recovery of daily life will be alternatives."
There was also advice to pay attention to beneficiary stocks as the strong dollar phenomenon is expected to continue for the time being. Kim Younghwan, a researcher at NH Investment & Securities, diagnosed, "Among export stocks, focus should be on sectors with high export ratios and those receiving sales proceeds in dollars, especially automobiles with low inventory pressure and K-Entertainment, which has succeeded in expanding fandom in the U.S. music market."
Meanwhile, as the domestic stock market showed a downward trend at the end of September, the returns of the top net purchase stocks by investor type all recorded losses in the -10% range. The average return of the top 10 net purchased stocks by individuals in September was -12.37%. During the same period, the average returns for foreigners and institutions were -10.83% and -9.24%, respectively.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
