The market capitalization of the securities market surpassed 2,000 trillion won for the first time. On this day, the KOSPI rose 2.47% to 2944.45, and the Korean stock market stepped on a level of’unreachable’. According to the Korea Exchange, the market capitalization of the securities market on this day was about 2029 trillion won. The market capitalization of KOSPI exceeded 1,000 trillion won for the first time on September 13, 2010, and it surpassed 2,000 trillion won in nine years and three months. Considering that the first breakthrough of the market cap of 1,500 trillion won was on May 12, 2017, the growth of the market cap was steep.
On the 4th, the KOSDAQ index rose 0.95% to about 389 trillion won in market capitalization. When the market caps of the two major markets were added, it reached 2418 trillion won. However, there are also observations that there is still a long way to go. The market capitalization of the two major stock markets in Korea is only the level of Apple, the world’s No. As of the 31st of last month, the market cap of Apple reached 2441 trillion won (based on the exchange rate on the 4th). The KOSPI market cap has been lagging since it was first overtaken by Apple in December 2019.
An official from the exchange said, “It is a milestone event that the KOSPI market cap exceeded 2,000 trillion won,” he said. “Although a lot of liquidity has been released in the market, it seems that liquidity is concentrated only in the stock market.”
The breakthrough of the KOSPI record on this day is the result of a large inflow of individual investment funds. On this day, individual investors net bought 1.3 trillion won in the securities market and 3773 billion won in the KOSDAQ market. Institutional investors net sold 1,189.9 billion won in the securities market alone on that day, and most of this was handled by individuals. The so-called “Donghak Ant Movement,” in which individuals directly invest in domestic stocks, is heating up the stock market at the beginning of the new year following last year.
The net purchase amount by an individual on this day was the highest ever since the statistics were compiled in 2001. Individuals net bought 5305 billion won last year and 309.3 billion won in 2019 in the securities market.
Until now, individuals have repeated the pattern of buying when the stock price is adjusted and selling when it rises again. Considering that the stock price has been on the rise since the end of last year, analysis shows that the trading method is evolving. Momentum investments, such as the so-called “Ride on the Running Horse,” are reappearing in the stock market. According to the Korea Exchange, as of the end of last year, the number of securities accounts increased by 6.12 million compared to the same period last year. This is a 20.7% increase.
The industries that hit the stock market on the 4th were semiconductors and batteries (rechargeable batteries). On this day, the share price of Samsung Electronics rose 2.47% compared to the previous day, and the share price of SK Hynix soared 6.33%.
According to the Korea Exchange, on the 4th, Samsung Electronics reached 84,400 won, up 4.2% from the previous trading day. At this time, the market cap reached 504 trillion won. The preferred stock, Samsung Electronics Woo, also rose to a record high of 75,300 won (2.31%) during the market, and the market cap reached 62 trillion won. Samsung Electronics’ stock price has been on the rise, surpassing KRW 70,000 on the 4th of last month and surpassing KRW 80,000 for the first time on the 30th of last month.
Three battery companies, such as LG Chem (7.89%), Samsung SDI (6.85%), and SK Innovation (21.58%), also attracted attention as the stock price surged on the day. Shares of Hyundai Motors (8.07%), Kia Motors (2.56%), and Hyundai Mobis (12.33%) also rose on the same day as they received expectations that the electric vehicle industry will expand rapidly.
However, experts advise to be cautious as the stock price has soared in recent years without any special good news. Jeong Yong-taek, head of the IBK Investment & Securities Research Center, interpreted that “all the good news such as the development of the Corona 19 vaccine has already been reflected in the stock price,” and “reflecting expectations for a rise in stock prices, the KOSPI surged from the first day of its opening.”
It is analyzed that funds from the sale of real estate under the government’s strong regulations are not flowing back into real estate due to an increase in the comprehensive real estate tax rate and are flowing to the stock market in search of an alternative. The disappearance of the break to prevent stock prices from overheating as the government banned short selling from September last year is fueling the inflow of individual investment funds to the stock market. “The stock market is somewhat overheating, so if we resume short selling from March, we will be able to adjust the stock price.”
[김규식 기자 / 신유경 기자]
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