Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Thematic (Sector/Industry)

Last month, foreign investors went on a buying spree in the Korea's second largest stock market, KOSDAQ. In contrast, they went on a selling spree in the Korea's largest stock market, KOSPI during the same period. This is very interesting since these foreign investors seem to be thinking that NPS initiated passive investing paradigm might have come to an end. In fact, foreign investors net purchased ₩536bil worth of KOSDAQ stocks in Sep alone. This is more than one fourth of their total net purchase from Jan to July. However, they net sold a total of ₩3.465tril worth of KOSPI stocks in the last two months. It seems clear that foreign investors' appetite has changed drastically in the last two months. That is, they are scooping up KOSDAQ stocks and dumping KOSPI stocks.<table class="table table-striped"><colgroup></colgroup><tbody><tr><td>(Shares, ₩)</td><td colspan="2">KOSDAQ</td><td colspan="2">KOSPI</td></tr><tr><td></td><td>Net trade volume</td><td>Net trade value</td><td>Net trade volume</td><td>Net trade value</td></tr><tr><td>Jan - July</td><td>-26,469,863</td><td>+2,036,022,065,002</td><td>303,361,818</td><td>+8,724,829,647,120</td></tr><tr><td>Aug</td><td>11,853,686</td><td>+276,445,341,427</td><td>15,985,082</td><td>-1,875,161,062,234</td></tr><tr><td>Sep</td><td>18,014,568</td><td>+535,789,044,679</td><td>-20,254,807</td><td>-1,589,880,870,918</td></tr><tr><td colspan="5">Source: KRX</td></tr></tbody></table>

Last month, foreign investors went on a buying spree in the Korea's second largest stock market, KOSDAQ. In contrast, they went on a selling spree in the Korea's largest stock market, KOSPI during the same period. This is very interesting since these foreign investors seem to be thinking that NPS initiated passive investing paradigm might have come to an end. In fact, foreign investors net purchased ₩536bil worth of KOSDAQ stocks in Sep alone. This is more than one fourth of their total net purchase from Jan to July. However, they net sold a total of ₩3.465tril worth of KOSPI stocks in the last two months. It seems clear that foreign investors' appetite has changed drastically in the last two months. That is, they are scooping up KOSDAQ stocks and dumping KOSPI stocks.(Shares, ₩)KOSDAQKOSPINet trade volumeNet trade valueNet trade volumeNet trade valueJan - July-26,469,863+2,036,022,065,002303,361,818+8,724,829,647,120Aug11,853,686+276,445,341,42715,985,082-1,875,161,062,234Sep18,014,568+535,789,044,679-20,254,807-1,589,880,870,918Source: KRX

Foreign Investors Vs. Local Institutions in Korean Stock Market - Who Is Right?

South Korea

Dongjin Semichem Co., Ltd. produces fine chemicals for semiconductor and liquid crystal display (LCD) manufacturing.  The Company's products include photoresist materials and epoxy molding compounds.  In addition, Dongjin Semichem also produces chemical foaming agents for plastic and rubber applications.

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Dongjin Semichem (005290 KS)

Foreign Investors Vs. Local Institutions in Korean Stock Market - Who Is Right?

Last month, foreign investors went on a buying spree in the Korea's second largest stock market, KOSDAQ. In contrast, they went on a selling spree...

Sanghyun Park

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