[Beginner's Guide to Stock Investing] Why Are Retail Investors Selling 'Samjeon' and Buying 'Samba'?

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[Asia Economy Reporter Kwon Jae-hee] 'Samsung Electronics' has led the rise of our stock market this year.

It is also well known as the most favored stock among individual investors.

However, recently, the trading trend of individual investors has been unusual.

Last year, individual investors were net buyers of Samsung Electronics, but recently they have been selling Samsung Electronics and buying Samsung Biologics.

Let's take a look at the background behind this trend.

Top Net Buyer: 'Samsung Biologics' / Top Net Seller: 'Samsung Electronics'

According to the Korea Exchange on the 23rd, the stock most net bought by individual investors this year (January 2 to January 18) is 'Samsung Biologics'.

During this period, individual investors purchased a total of 116 billion KRW worth of Samsung Biologics shares.

On the other hand, the stock most net sold by individual investors during the same period was Samsung Electronics.

Individual investors sold a total of 1.02 trillion KRW worth of Samsung Electronics shares during this period.

This amount is about twice the size of the second highest net sold stock, SK Hynix (approximately 522.3 billion KRW).

This is quite different from last year (January 3, 2022 to December 29, 2022), when individual investors steadily bought Samsung Electronics shares despite the stock price decline.

Although Samsung Electronics' stock price fell about 33% from the peak of 78,900 KRW in January last year to the lowest point of 52,600 KRW in September, individual investors purchased over 16 trillion KRW worth of Samsung Electronics shares.

The Only Emperor Stock: 'Samsung Biologics'

So why are individual investors selling Samsung Electronics and buying Samsung Biologics?

In the securities industry, there is a positive outlook that semiconductor stocks hit bottom in the first quarter and the semiconductor market will improve from the second half of this year.

As expectations for Samsung Electronics, which has not surpassed the '70,000 KRW mark' since last March, have collapsed, individual investors appear to be selling whenever the stock price rises.

On the other hand, Samsung Biologics maintains its position as the only emperor stock, reflecting the psychology of 'buying when cheap'.

Despite the stock market collapse last year that wiped out emperor stocks priced over 1 million KRW per share,

Samsung Biologics still holds its reputation as an emperor stock, with securities firms setting target prices above 1 million KRW.

According to financial information provider FnGuide, Samsung Biologics is currently the only stock with a target price above 1 million KRW set by three or more securities firms.

2023 Bio Industry Outlook

Last year, large companies like Samsung Biologics, which could rely on earnings and valuation amid external issues such as interest rate hikes, were relatively resilient.

However, bio stocks lacking surprises such as technology transfers and clinical data, as well as COVID-related stocks, continued to decline.

This year, funding conditions are difficult, and securing talent is also challenging.

While the U.S. Inflation Reduction Act (IRA) poses difficulties for rare disease drug developers, it is expected to create a favorable environment for biosimilar companies.

The securities industry recommends overweighting the pharmaceutical and bio sectors.

The reason is that technological innovation continues, and the environment is favorable for biosimilars, which are the core of K-Bio.

However, it is not an entirely rosy renaissance, so the outlook is cautiously positive.

This article is from [Beginner Investor's Guide], published weekly by Asia Economy. We explain stock-related financial news and complex economic stories in an easy and friendly way so that stock beginners can understand. Click subscribe to receive articles for free.

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