Korean retailers put $171.4 bn in local, offshore stocks over last two years

[Photo by Yonhap]

South Korean mom-and-pop investors are in panicky mood from stock market crashes in the U.S. and at home after having put more than 220 trillion won ($171.4 billion) in domestic and offshore – mostly in U.S. - shares over the last two years.

According to data from Korea Exchange and Korea Securities Depository on Thursday, Korean individuals net purchased 226.1 trillion won worth of local and foreign stocks from early 2020 to May 6. They net bought 165.2 trillion won in local stocks including 132.2 trillion won on the main Kospi and 33 trillion won on Kosdaq.

Last year, individual investors net purchased a record 76.9 trillion won in local shares, data showed, up from 63.9 trillion won in 2020. The amounts are up sharply from 5.5 trillion won in 2019.

Samsung Electronics Co. was their top pick at home and Tesla overseas.

Ever since the Covid-19 outbreak, retail investors net bought 51.8 trillion won in the bellwether stock. They also purchased 12.5 trillion won worth of Samsung Electronics preferred shares to bring their holding total to 64.2 trillion won, accounting for nearly 40 percent of entire purchase.

Retail investors also net purchased 5.8 trillion won each in big tech firms Kakao Corp. and Naver Corp., 5.7 trillion won in Hyundai Motor Co., 4 trillion won in Hyundai Mobis Co., 3.9 trillion won in SK hynix Inc., 2.2 trillion won in LG Electronics Inc., and 2.1 trillion won in Korea Electric Power Corporation.

Retail investors¡¯ net purchase in overseas stocks through Korea Securities Depository reached $52.23 billion since early 2020.

Retail investment in overseas stocks jumped sharply after the pandemic – from $1.57 billion in 2018 and $2.51 billion in 2019 to $19.73 billion in 2020 and $21.86 billion in 2021.

This year, individuals have net purchased $10.6 billion in overseas stocks, already outpacing half of last year¡¯s entire amount, as U.S. market fared better than Korea¡¯s.

The most popular target was Tesla Inc.

Retail investors net purchased $7.22 billion in Tesla shares during the cited period, $3.2 billion in Apple Inc. and $1.65 billion in Alphabet Inc.

But mom-and-pop investors could be burned due to bearishness at home as well as in the U.S. due to faster tightening and stagflation scare.

The benchmark Kospi has lost psychologically-important 2,600 threshold and is off 12 percent the peak of 3,305 last year. It is the first time in 17 months for the Kospi to finish below 2,600.

The S&P 500 index fell 16 percent this year and Dow Jones 30 Industrial Index 12 percent. The tech-heavy NASDAQ Composite Index plummeted nearly 25 percent.

Large-cap stocks were major victims.

As of May 8, Tesla shares were down 24.3 percent from the beginning of the year, Apple 13 percent, Nvidia 40 percent, Alphabet 21 percent, and Amazon.com 35 percent.

In domestic markets, Samsung Electronics shares fell 16 percent over the same period, Kakao 24 percent, and Naver 26 percent.

Yet retailers are yet to stop their stock frenzy.

This year, individuals net purchased 25.3 trillion won in local shares and 13.5 trillion won in foreign shares.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]