As the KOSPI index has experienced significant fluctuations since reaching a record high, individual investors have poured over 35 trillion won into the market during this correction phase. Retail investors, often referred to as 'ants,' have focused their purchases on major semiconductor stocks such as SK Hynix and Samsung Electronics.
According to the Korea Financial Investment Association, since the KOSPI hit its peak on June 22, individual investors have net bought a total of 35.8 trillion won, including 27 trillion won in individual stocks and 8.8 trillion won in domestic equity exchange-traded funds (ETFs).
The bulk of this investment has flowed into semiconductor giants. From June 22 to July 16, individuals net purchased 23.34 trillion won worth of SK Hynix, making it the most bought stock. Samsung Electronics also saw net purchases of 13.23 trillion won, with over 36.5 trillion won invested in these two stocks alone.
Foreign and institutional investors have also shown interest in semiconductor and AI-related stocks, but their choices differed. Foreign investors net bought 9.96 trillion won of LG Innotek, followed by Samsung Electro-Mechanics at 4.92 trillion won and Hanmi Semiconductor at 3.42 trillion won. Institutions focused on SK Square, purchasing 17.48 trillion won, along with significant buys in Samsung Electronics (12.41 trillion won) and Isu Petasys (6.71 trillion won).
However, the investment performance has been disappointing. Comparing the closing prices from June 22 to July 16, SK Hynix, the top net purchase by individuals, fell from 2,919,000 won to 1,842,000 won, a decline of 36.9%. LG Innotek, the most purchased by foreigners, dropped 40.9%, while SK Square, the top net purchase by institutions, fell 38.5%.
While individual investors have been active in buying during the correction, the use of borrowed funds for investment and cash reserves have significantly decreased. The Korea Financial Investment Association reported that the balance of margin trading loans fell from 38.53 trillion won on June 22 to 34.37 trillion won on July 15, a decrease of 4.16 trillion won (10.8%). This decline is attributed to position adjustments and profit-taking to avoid forced selling during the market downturn. During the same period, investor deposit funds also dropped from 132.19 trillion won to 109.87 trillion won, a decrease of 22.32 trillion won (16.9%).
Despite this, analysts believe that individual investors still have significant buying power. They argue that the decrease in investor deposit funds alone does not indicate weakened demand, as actual deposits continue to show a net inflow. Lee Sang-yeon, a researcher at Shin Young Securities, stated, "Investor deposits are an indicator that moves in tandem with the stock index, and based on actual deposits reflecting cash inflows and outflows, the net inflow trend continues. Individual demand has not collapsed yet, and as long as the bullish market trend persists, its impact will be limited." He added that in a phase where borrowing costs are rising, the pace of expansion in margin and unpaid trading could slow or reverse.
Kim Jae-seung, a researcher at Hyundai Motor Securities, also noted, "Rather than judging individual investor sentiment and demand solely based on customer deposit funds, it is essential to consider net purchases of individual stocks and domestic equity ETFs together."
Looking ahead, the key question is whether the accumulated buying by individual investors during the correction will translate into selling during a market rebound. Kim emphasized, "Since individual buying has concentrated around the KOSPI range of 7,000 to 8,500, attention should be paid to the potential for selling pressure when the market rebounds."
* This article has been translated by AI.
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