[MarketING] Secondary Battery Concentration Shifts from Ecopro Stock to POSCO Stock

KOSPI and KOSDAQ Rebound in One Day, Closing in Strong Positive Territory
Posco Group Stocks Surge Consecutively Amid Strong Secondary Battery Material Stocks

The KOSPI and KOSDAQ rebounded after a day. The rise was limited due to profit-taking selling pressure, and both indices remained in a narrow range. The concentration on secondary battery stocks is easing, but as buying interest shifts from EcoPro stocks, which had been the focus, to POSCO group stocks, the POSCO group stocks have been showing sharp gains day after day.

KOSPI rebounds after a day, closes in a strong flat range

On the 19th, the KOSPI closed at 2,575.08, up 3.99 points (0.16%) from the previous day. The KOSDAQ ended the session at 909.20, up 0.18 points (0.02%).

[Image source=Yonhap News]

While foreigners showed selling pressure, institutions bought net in the securities market, and individuals bought net in the KOSDAQ market, defending the index from falling. On that day, institutions purchased 45.1 billion KRW in the securities market, and individuals net bought 163.7 billion KRW in the KOSDAQ market. Foreigners sold 19.3 billion KRW in the securities market and 106.8 billion KRW in the KOSDAQ market, respectively.

Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "Both KOSPI and KOSDAQ fluctuated within a narrow range," adding, "The concentration phenomenon in specific sectors such as secondary battery materials continued."

Although the concentration on secondary batteries has recently eased, the buying interest that had been focused on EcoPro and EcoPro BM is shifting to POSCO group stocks, which are secondary battery material stocks. As a result, POSCO group stocks have been showing sharp gains one after another. On that day, POSCO Future M rose 8.38%, surpassing NAVER to enter the top 10 in KOSPI market capitalization. It had previously surpassed Kakao on the 17th. POSCO Future M's stock price soared from 272,500 KRW at the end of last month to 414,000 KRW. POSCO DX, a KOSDAQ-listed company, also rose at a rapid pace. POSCO DX's stock price increased from 9,500 KRW at the end of last month to 16,600 KRW. POSCO DX, which surged for four consecutive days recently, closed down by about 2% on that day but had risen more than 8% the previous day and even hit the upper limit on the 17th. POSCO Steelion also recorded the upper limit on the 17th and showed a three-day consecutive surge until the previous day. While POSCO Holdings, which had risen sharply earlier, paused, other affiliates have been showing sharp gains one after another. Since the beginning of the year, POSCO group stocks have increased their market capitalization by more than 20 trillion KRW, fueled by the secondary battery boom.

Individual investors' demand concentrated on secondary battery stocks

The concentration of individual investors on secondary battery stocks is prominent. On that day, individuals bought EcoPro the most at 121.5 billion KRW, followed by LG Chem (106.3 billion KRW), POSCO Holdings (83.9 billion KRW), Enchem (61.7 billion KRW), POSCO Future M (59.8 billion KRW), and LG Energy Solution (53.1 billion KRW), with many secondary battery stocks ranking high in net purchases. Since the beginning of this month, individuals have net bought POSCO Holdings the most, with 2.8885 trillion KRW. EcoPro followed with 427 billion KRW. EcoPro BM was bought for 118 billion KRW, LG Chem for 116.9 billion KRW, and L&F for 95.8 billion KRW, showing concentrated buying of secondary battery stocks.

Choi Yoo-jun, a researcher at Shinhan Investment Corp., analyzed, "Customer deposits are increasing, and individual demand inflow into the stock market continues," adding, "This is positive for stock price direction, but rather than spreading to many stocks, the concentration on specific stocks is actually strengthening." He added, "Although individuals have net sold nearly 1 trillion KRW cumulatively in the securities market in April, they have net bought more than 2 trillion KRW in POSCO Holdings, and most of the net buying amount in KOSDAQ was concentrated on the secondary battery value chain."

However, there is a forecast that the concentration will gradually ease. Kang Dae-seok, a researcher at Yuanta Securities, analyzed, "In the first quarter of this year’s stock market, the return gap between the secondary battery sector and related sectors was large," adding, "But as of last week, other sectors such as pharmaceuticals & bio, entertainment & media have risen to levels similar to secondary batteries, showing signs of easing concentration."

If the concentration eases, the KOSPI is expected to show relatively strong performance. Researcher Kang said, "The concentration on KOSDAQ centered on secondary batteries this time was at an all-time high level," adding, "It is necessary to note that in past phases when concentration eased, the relative strength of KOSPI tended to recover."