[2023 Stock Market Outlook] "All Top Domestic Net Purchase Stocks Are Negative... Next Year Looks Bleak"

Favorite Stock of Donghak Ants 'Samsung Electronics'
Possibility of Recovery After Semiconductor First Half
Seohak Ants Rank Tesla as No.1 Purchase
Likely to Be 'Forced Long-term Investment' Next Year as Well

[Asia Economy Reporters Kwon Jaehee and Lee Minji] The performance of individual investors who continued relentless net buying even in this year's bear market is dismal. The returns of the top 10 net purchased stocks are all negative (-). The outlook for these stocks next year is also not bright. This is because the ‘earnings decline cycle’ is expected to fully materialize due to the economic recession, meaning these stocks will be significantly affected by business conditions.

◆ The performance of Donghak Ants depends on the ‘semiconductor industry’ = On the 8th, Asia Economy analyzed the top 10 stocks most net purchased by individual investors in the domestic stock market from January 3 to November 30 this year, revealing that Samsung Electronics firmly held the first place with net purchases worth 15.5149 trillion KRW. This is about five times more than the second place, Naver (3.1972 trillion KRW).

None of the stocks yielded profits. Among the top 10 net purchased stocks, three (Samsung Electronics, Samsung Electronics Preferred, SK Hynix) are semiconductor stocks, so it is no exaggeration to say that the performance of Donghak Ants next year depends on the semiconductor industry. Experts believe that the semiconductor downcycle is likely to continue next year. However, the ongoing semiconductor inventory adjustment raises the possibility of industry recovery after the first half of next year, which is a positive sign.

Oh Gyu-jin, a researcher at DB Financial Investment, said, "With limited supply increase, the lowered memory prices are expected to trigger shipment growth, leading to a rebound in the memory market from the third quarter of next year."

Regarding platform companies such as Naver and Kakao, advice has been given to consider buying at the bottom. Oh Dong-hwan, a researcher at Samsung Securities, said, "Platform companies have experienced continuous stock price declines over the past year and a half due to slowed core revenue growth from economic slowdown and increased costs, so once signs of profit rebound are confirmed, stock prices will quickly recover. The structural growth potential of online advertising, e-commerce, and digital content markets remains valid, so low-price buying is recommended."

◆ Seohak Ants ‘Tesla’... Outlook in the fog = According to the Korea Securities Depository’s securities information system SaveRO, the most net purchased stock by individual investors this year until November 30 was Tesla, with net purchases totaling 3.4285 trillion KRW.

As the bear market prolonged, the appetite for leveraged exchange-traded funds (ETFs) also grew. Investors placed trillion-won orders for ‘ProShares UltraPro QQQ ETF (3.0991 trillion KRW)’ and ‘Direxion Daily Semiconductor 3x ETF’ (2.0667 trillion KRW). Both ETFs are leveraged types that aim to earn three times the return of their underlying indices, frequently sought by investors aiming for large short-term gains.

Despite bold bets on leveraged ETFs, satisfactory profits were not achieved. Both the Nasdaq 100 index and the Philadelphia Semiconductor index have sharply declined since the beginning of the year.

Most of the top 10 net purchased stocks likely became forced long-term investments as losses deepened. Especially if investors bet despite the strong dollar in the second half of the year, while stock prices remained flat, the won-dollar exchange rate fell from the 1450 won level to the 1300 won level, likely increasing losses.

It is unlikely to expect a positive return next year either. Due to the economic recession, it is difficult to expect a sustained rise in ETFs based on underlying indices. Tesla is also predicted to show sluggish stock price movement due to the direct hit from weakened Chinese consumption. For the semiconductor industry, incomplete supply-demand imbalances are expected to be resolved only after the second half of next year. Seo Seung-yeon, a researcher at Shin Young Securities, said, "For a stock price rebound in semiconductor stocks, recovery in Chinese mobile IT demand and accelerated memory inventory depletion are necessary."