As the domestic stock market experiences a correction in the second half of the year, individual investors are shifting their funds to the U.S. stock market. In the past two months, individual investors have net purchased nearly 10 trillion won worth of U.S. stocks, surpassing the net purchases in the Korean securities market.
According to the Korea Securities Depository's securities information portal, Saveuro, individual investors net purchased $7.03879 billion in U.S. stocks from July 1 to August 27. Applying an exchange rate of 1,380 won to the dollar, this amounts to approximately 9.7135 trillion won. This figure is about 960 billion won higher than the net purchase of 8.7532 trillion won in the Korean securities market from July 1 to August 28. Compared to the net purchase of 1.5717 trillion won in the KOSDAQ market during the same period, it is more than six times greater.
The buying momentum for U.S. stocks accelerated in July. Individual investors net purchased $4.64241 billion last month and added another $2.39637 billion by August 28. The total net purchase over the two months accounts for about 71% of the total net purchase of $9.86780 billion in the first half of this year.
The contrasting trends in domestic and international stock markets appear to have influenced this capital movement. The KOSPI index reached an all-time high of 9,114.55 on June 22 but entered a correction, dropping to the 6,000 range by mid-July. In contrast, the S&P 500 index rose 3.1% from 7,499.36 at the end of June to 7,730.99 on August 27, while the Nasdaq index increased by 1.2% from 26,213.72 to 26,541.35.
Individual investors have focused their funds on U.S. semiconductor-related products. The top net purchase over the two months was the Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL), which tracks the Philadelphia Semiconductor Index's daily returns threefold, with a net purchase amounting to $3.00632 billion. This represents 42.7% of the total net purchase of U.S. stocks.
The recent strength of AI and semiconductor stocks in the U.S. market has also influenced investor sentiment. According to Yuanta Securities, Nvidia's quarterly results and revenue guidance exceeded market expectations, leading to an 8.74% increase on August 27 (local time). The technology sector rose by 3.16%, outperforming other sectors. Broadcom and Intel also saw increases of 4.49% and 4.36%, respectively, contributing to a broader rise in semiconductor stocks.
However, individual investors' trading behavior varied by stock. Over the two months, they net sold $748.9 million in Nvidia while net purchasing $815.42 million in SK Hynix ADRs. They also bought $647.17 million in Alphabet and $514.96 million in SpaceX.
The amount of idle funds in the domestic stock market has decreased. Investor deposits fell from 132.4696 trillion won on June 29 to 98.9176 trillion won on August 26, a reduction of approximately 33.552 trillion won over two months.
Shin Seung-jin, head of the investment information team at Samsung Securities, stated, "The recent decline in the won-dollar exchange rate has increased individual investors' demand for dollar conversions, and the increased volatility of the KOSPI and the decline of leading semiconductor stocks have led to a rise in demand for alternative investments in U.S. stocks."
* This article has been translated by AI.
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