The Return of Ants: 3 Trillion Won Storm of Net Buying This Month on Bargain Hunting

Individuals Net Buy Over 3 Trillion Won This Month
Largest Monthly Scale This Year
Focused Net Buying of Semiconductor Stocks Amid Recent Sharp Decline
Investor Deposits, a Market Waiting Fund, Also Increase

Individual investors, who had been withdrawing from the domestic stock market earlier this year, have returned this month with the largest monthly net buying volume of the year. This is interpreted as active bargain hunting following the recent sharp decline. Additionally, individuals have been buying leveraged exchange-traded funds (ETFs), indicating a bet on stock price increases.

According to the Korea Exchange on the 8th, individual investors have net purchased 3.4688 trillion won in the KOSPI market from the beginning of this month through the 6th. This is the largest monthly amount so far this year. Previously, individuals bought 2.8611 trillion won in January but sold 8.412 trillion won and 6.0589 trillion won in February and March, respectively. In April and May, they returned with net purchases of 46.9 billion won and 757 billion won, respectively, but these amounts were minimal compared to the earlier sales. Then, in June and July, they again net sold 2.6737 trillion won and 2.8186 trillion won, respectively.

The active net buying by individuals this month is interpreted as bargain hunting due to the recent sharp decline. The KOSPI has dropped more than 7% since the beginning of this month. Although it rebounded after the sharp falls on the 2nd and 5th, the recovery is still insufficient to offset the losses.

Junho Byun, a researcher at IBK Investment & Securities, said, "Due to the stock market crash, an overreaction in the decline occurred, turning the market into one where 'price' is prioritized in the short term," adding, "Various market sentiment indicators and technical indicators such as divergence suggest the possibility of a short-term bottom."

Individuals who engaged in bargain hunting focused their net purchases on Samsung Electronics and SK Hynix. By the 6th, individuals had net purchased 2.5754 trillion won of Samsung Electronics and 738.7 billion won of SK Hynix. Lee Eui-jin, a researcher at Heungkuk Securities, analyzed, "As of the closing price on the 6th, the 12-month forward price-to-book ratio (PBR) for Samsung Electronics and SK Hynix stood at about 1.20 and 1.35 times, respectively, which is a significant decline compared to the closing prices on July 11, when they were 1.50 and 2.10 times, respectively, over 18 trading days."

Moreover, individuals heavily net purchased KODEX Leverage (649.1 billion won) and KODEX KOSDAQ150 Leverage (221.4 billion won), showing a bet on stock price increases. KODEX Leverage and KODEX KOSDAQ150 Leverage track the daily movements of the KOSPI 200 and KOSDAQ 150 indices, respectively, at twice the positive leverage, allowing for approximately double the gains on upward movements. In particular, individuals actively responded to the crash by net buying KODEX Leverage worth 269.2 billion won and 438.2 billion won on the sharply falling days of the 2nd and 5th, respectively.

Investor deposit funds, which are standby funds for the stock market, have also increased significantly, raising expectations for future capital inflows into the stock market. According to the Korea Financial Investment Association, investor deposit funds reached 59.4876 trillion won on the 5th, an increase of 5.6197 trillion won compared to the 2nd of this month. The last time investor deposit funds were in the 52 trillion won range was on January 2 (59.4949 trillion won) and April 1 (59.6299 trillion won). Investor deposit funds refer to money that investors have deposited in securities accounts for stock investments or funds left unwithdrawn after selling stocks. They are considered standby funds preparing to enter the stock market and serve as an indicator of stock investment enthusiasm.