Retail investors concentrated their buying on leveraged exchange-traded funds tracking the KOSPI, the KOSDAQ and semiconductor stocks on the 13th, when the KOSPI plunged more than 6%.
Three of the five products retail investors bought most heavily on that day were leveraged products tied to domestic stock indexes and semiconductors, according to Koscom's ETF CHECK on the 14th. The most heavily bought product was KODEX Leverage, which tracks twice the daily return of the KOSPI 200, with net purchases of 361 billion won ($252 million). Retail investors also bought a net 100.4 billion won of KODEX KOSDAQ150 Leverage and 59.3 billion won of KODEX Semiconductor Leverage. They additionally purchased 125.2 billion won of KODEX 200 Target Weekly Covered Call, which invests in the KOSPI 200 while selling weekly call options and paying out the premiums as dividends.
Industry watchers said the buying came from investors who judged the drop to be a temporary one caused by a gap in supply and demand rather than deteriorating corporate earnings, and who expect share prices to rebound. The move reflects attention to the fact that profit outlooks for the semiconductor companies driving the domestic market have not been damaged, even if trading could remain sluggish until the supply-demand strain eases, they said. Forward price-to-earnings ratios for the KOSPI and for semiconductors stand at 4.6 times and 3.2 times, respectively, near record lows, according to Kiwoom Securities.
Inverse products, whose returns rose because of the sharp decline, ranked among the biggest net sales as investors moved to lock in gains. Retail investors sold a net 65.5 billion won of KODEX 200 Futures Inverse 2X and 37 billion won of KODEX Inverse. They also sold a net 13.7 billion won of SOL SK hynix Futures Single Stock Inverse 2X.
"In the end, the earnings of semiconductor companies matter most for the domestic market," said Lee Jong-hyung, head of the research center at Kiwoom Securities. "With retail investors, who supported supply and demand in the first half, now pulling back and foreign investors selling since August, the supply-demand picture is tangled, so it is not easy for the market to rise right away."