Chinese Consumer-Related Stocks Rally Together
Institutions 'Buy' One Day Before Ex-Dividend Date
KOSDAQ Rises 1.37%, Recovers 700 Level
[Asia Economy Reporter Hwang Yoon-joo] The KOSPI and KOSDAQ indices closed higher on the 27th. Institutional buying drove the indices ahead of the ex-dividend date (28th). In particular, Chinese consumer stocks showed strength amid reopening expectations following the Chinese government's announcement of 'With Corona' measures.
On the day, the KOSPI closed at 2,332.79, up 0.68% (15.65 points) from the previous day. It started the session at 2,327.52, up 0.45% (10.38 points), and rose slightly due to supply and demand factors.
Right after the opening, institutions alone took a 'buy' stance, and foreign investors joined in during the morning, pushing the index higher. Foreigners and institutions net bought 50.3 billion KRW and 1.098 trillion KRW, respectively. Foreigners purchased 416 billion KRW in the futures market.
On the other hand, individuals sold off 1.1331 trillion KRW. This is interpreted as individual selling to meet the major shareholder capital gains tax criteria. Individuals must reduce the market value of their holdings to 1 billion KRW or lower their shareholding ratio to 1% (KOSPI) or 2% (KOSDAQ) by two business days before the closing date (29th) to avoid being classified as major shareholders.
Among the top market capitalization stocks, LG Chem rose the most at +1.62%. This was followed by Naver +1.40%, Celltrion +0.85%, Samsung Biologics +0.73%, Kia +0.63%, and Samsung Electronics +0.35%. SK Hynix, Samsung SDI, and Hyundai Motor closed flat. Only LG Energy Solution fell by -0.11%.
In particular, Chinese reopening-related consumer stocks showed strength. Cosmetics stocks surged with Tony Moly +13.75% and Amorepacific +6.39%. Duty-free store stocks also closed higher, with Hotel Shilla +4.94%, Shinsegae +2.84%, and Hyundai Department Store +0.68%. Low-cost carriers (LCC) such as T'way Air +5.45%, Jeju Air +5.02%, and Jin Air +3.05% also ended on an upward trend.
Earlier, the Chinese government announced that from January 8 next year, quarantine for overseas arrivals and PCR tests upon departure will be abolished. This effectively means abandoning the 'Zero COVID' policy. This is interpreted as expanding investment sentiment toward related stocks.
The domestic equity team at Shinhan Investment Corp Research Center explained, "Due to the Chinese government's announcement of comprehensive reopening measures, KOSPI saw a broad rally in Chinese consumer theme stocks such as duty-free, cosmetics, apparel, and distribution sectors. Moreover, as it was the last trading day to receive year-end dividends, dividend income-focused funds centered on institutions flowed into large-cap stocks."
The KOSDAQ started at 697.25, up 0.37% (2.57 points) from the previous day, and closed at 704.19, up 1.37% (9.51 points). Similarly, foreigners and institutions net bought 113.5 billion KRW and 302.8 billion KRW, respectively, driving the index higher. Meanwhile, individuals sold 410.3 billion KRW.
Among the top market capitalization stocks, HLB (+4.13%) rose the most. This was followed by Pearl Abyss +2.30%, Kakao Games +1.29%, L&F +1.15%, and Celltrion Healthcare +1.06%. Only Celltrion Pharm -1.58% and Studio Dragon -0.11% declined. KOSDAQ also saw sharp rises in Chinese cosmetics-related stocks such as Cosmecca Korea (+21.33%) and Yewoo (+10.67%).
The domestic equity team at Shinhan Investment Corp Research Center explained, "In the case of KOSDAQ, short-term upward momentum was highlighted mainly in sectors benefiting from China's reopening, showing strength. Additionally, expectations for the JP Morgan Healthcare Conference also played a role."
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