Private investors led the wave of outstanding price increases of Korean stocks



While amateurs are flocking to global stock markets amid a pandemic, the craze of private investors in Korean stocks is taking to another level.

Intraday private investors accounted for 87.5% of South Korea's total stock trading value from the beginning of the month to September 8, according to data from the Korea Exchange.  This figure increased from 51.4% for the whole March.

Private investors led the wave of outstanding price increases of Korean stocks

The craze of private investors in Korean stocks is taking to another level / ph: pexels

 Known for their risk aversion, private investors appear to be changing the shape of the Korean market.  They are the force behind the 64% rebound of the Kospi index from a half-year low, having net bought about $ 21.6 billion while foreign funds and investment organization sold.

 In the US, the Robinhood craze, retail investors account for 20% of stock trading value, up from 15% historically, according to Bloomberg Intelligence data.

Private investors appear to be looking for short-term returns after hearing whispers about having made a lot of money from the rally, according to chief strategist at Samsung Securities.

 They not only focus on preferred stocks, stocks of healthcare companies, but also blue-chip companies.  As with Samsung Electronics it is 81% of transaction value as of this month and that of SK Hynix is ​​close to 76%.

 The private investors' tentacles also spread to the IPO market.  A report shows that these private investors have ordered more than 1,500 times the amount of shares offered for sale by Kako Games Corp.  Shares of this company increased 160% compared with the reference price in the launch session.

 Up to now, short-term private investors account for nearly 65% ​​of the value of Kospi shares traded, compared to 47.5% for the whole year of 2019.

 Fear of missing out on the wave of historic recovery has made Koreans borrow money to invest.

 Outstanding margin of retail stock transactions rose to a record 16,900 billion won ($ 14.2 billion), according to data from the Korea Financial Investment Association.  Shinhan Investment Group, based in Seoul, said it would stop lending on 3/9 because the limit has been reached.

 The growing stature of private investors is causing some investors to be concerned about the possible threat to the market causing a risky event to cause them to withdraw their funds abruptly.

 Analysts at Korea Investment & Securities say that private investors' influence on the stock market is increasing every day.

Private investors led the wave of outstanding price increases of Korean stocks

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