Retail investors’ net purchase of EV battery stocks total $11.25 bn this year

Individual investors in the South Korean stock market are confirmed to have invested nearly 15 trillion won ($11.25 billion) in secondary battery-related companies this year, which have sparked overheating concerns. However, with the prices of these secondary battery stocks dropping by over 20 percent from last month’s peak, investors who jumped on the bandwagon of buying near the peak are estimated to have incurred valuation losses.

According to the Korea Exchange on Monday, this investment is four times higher than the net purchases by individuals in the Kospi and Kosdaq markets combined, which amounted to 3.53 trillion won this year.

The 33 secondary battery-related companies consist of 12 Kospi-listed firms including POSCO Holdings and 21 Kosdaq-listed firms including EcoPro.

The surge in net purchases by individuals mainly focused on several companies including POSCO Holdings, EcoPro, EcoPro BM, and L&F.

Among the Kospi-listed companies, individuals purchased the most shares of POSCO Holdings, totaling 9.8 trillion won. They also net purchased shares of LG Chem (1.11 trillion won), SK innovation (635.9 billion won), and POSCO Future M (281.6 billion won). In the Kosdaq market, individuals bought shares of both EcoPro and EcoPro BM, totaling 1.03 trillion won, and L&F for 686.9 billion won.

However, the stock prices of these secondary battery-related companies that have been embroiled in overheating concerns fell by over 20 percent this month from their recent peaks.

For instance, POSCO Holdings, which individuals purchased the most, surged from 211,000 won at the end of September last year to its peak of 764,000 won on July 26 this year, an increase of 3.6 times. However, by August 11, the price dropped to 577,000 won, down 24.5 percent from its peak.

POSCO Future M’s price soared from 144,000 won on August 9 last year to its peak of 694,000 won on July 26, a 4.8-fold increase. Yet, as of August 11, the closing price stood at 445,000 won, down 36.5 percent.

EcoPro, which skyrocketed by 15 times in a year to create a buzz in the Kosdaq market, climbed from 100,000 won at the end of August last year to its peak of 1,539,000 won by the end of last month, but has recently retreated to the 1,000,000 to 1,200,000 won range.

Similarly, EcoPro BM surged from 86,900 won at the end of September last year to an intraday high of 584,000 won on July 26, a 6.7-fold increase, but has since fallen to the 320,000 won range.

As a result, investors who joined the secondary battery boom belatedly are likely facing inevitable losses. According to Kiwoom Securities, the average purchase price of POSCO Holdings and POSCO Future M by individual clients last month was at 585,600 won and 506,100 won, respectively, which are higher than the current stock prices.