Retail investors have snapped up 4.6 trillion won worth of shares this month as the Kospi repeatedly set record highs, betting that Korean equities — led by semiconductors — still have further room to run amid FOMO sentiment.
According to the Korea Exchange on the 9th, individual investors net purchased a combined 4.598 trillion won of Kospi shares between the 4th and 8th of this month. Foreign investors dumped 5.9736 trillion won worth of stocks during the same period, but retail buyers absorbed the supply and defended the index. The Kospi has set successive all-time highs this month, closing at 7,498.00 the previous day — just two points shy of breaching the 7,500 mark on a closing basis.
Retail investors' top picks were overwhelmingly semiconductors. During the period, individuals net bought 946.4 billion won of SK hynix, followed by 859.5 billion won of Samsung Electronics preferred shares and 651.5 billion won of SK Square. Samsung Electronics common shares also ranked near the top with 176.2 billion won in net buying.
The continued retail buying despite foreign selling reflects expectations that the market still has significant upside. Both domestic and overseas brokerages have been raising their Kospi targets. Daishin Securities lifted its year-end Kospi target to 8,800 from 7,500 the previous day, while NH Investment & Securities went further, setting a target of 9,000.
Foreign investment banks have also issued bullish outlooks on the Kospi. Goldman Sachs raised its Kospi target to 9,000 in a report dated the 7th (local time) — a 1,000-point upgrade less than a month after lifting the target to 8,000 from 7,000. Citigroup also raised its Kospi target to 8,500.
In its report, Goldman Sachs said, "Korean equities remain attractive even after staging one of the hottest rallies in the world," adding, "The market has already delivered one of the most remarkable rallies globally this year, but it is not yet over." The bank continued, "Considering the likelihood that elevated earnings in the memory semiconductor sector will be sustained for an extended period, the market is underestimating this," noting, "Even after the recent surge, shares are still trading at relatively low valuations, making them attractive."
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