Korean Retail Investors Pivot to Individual Tech Stocks, Betting on Amazon and Micron
“Seohak ants,” Korean retail investors in U.S. equities, have been buying up individual technology stocks in large volumes this month.
According to SEIBro, the securities information portal of the Korea Securities Depository, Korean retail investors net-purchased 151.49 million dollars (215 billion won) worth of Amazon from the 3rd to the 6th, based on the query date, the depository said on the 8th. Net purchases of Micron and SanDisk also reached 151.02 million dollars (214 billion won) and 147.62 million dollars (209.2 billion won), respectively.
This stands in contrast to last month, when the Direxion Daily Semiconductor Bull 3X Shares ETF, known as “SOXL” and tracking three times the daily return of the U.S. Philadelphia Semiconductor Index, and the American depositary receipts (ADRs) of SK hynix ranked first and second. At that time, Amazon, Micron, and SanDisk did not even make the top 50 in net purchase settlements.
This month, however, SK hynix ADRs slipped to fifth, while SOXL was pushed out of the top 50. During the period, retail investors net-sold 1.84254 billion dollars (2.612 trillion won) worth of SOXL.
The renewed accumulation of top tech stocks by market cap is attributed to a sharp rebound in share prices, as Big Tech firms’ cloud businesses collectively delivered earnings that beat market expectations.
On the 31st of last month, major semiconductor-related stocks posted double-digit gains, including Amazon (15.32%), Micron (18.36%), SanDisk (25.99%), AMD (13.00%), and Intel (11.30%), while the Philadelphia Semiconductor Index jumped 8.19%.
Meanwhile, investor deposits, funds held on standby for stock investment, stood at 104.0712 trillion won as of the 6th, little changed from the previous week’s 104.6584 trillion won.
Deposits briefly rose to 110.4071 trillion won on the 4th of this month, but this is attributed to the temporary inflow and outflow of large funds as K&S I&C, a satellite communications antenna solutions company, conducted a public share subscription for general investors from the 4th to the 5th.
The balance of credit trading loans, an indicator of leveraged investment, or “bit-tu” (investing with borrowed money), fell 10.4% from the previous week to 28.794 trillion won.
Over the past week, from July 31 to August 6, the product with the largest fund inflow in the ETF market was “KODEX Leverage” (448.2 billion won). This is presumed to reflect a balloon effect, as some funds shifted to index leverage amid tighter regulation of single-stock leverage products.
It was followed by “KODEX KOSDAQ150” (423.7 billion won), “KODEX 200” (382.7 billion won), “TIGER U.S. S&P500” (199.1 billion won), and “KODEX KOSDAQ150 Leverage” (181.7 billion won). Single-stock leverage products, for which the basic deposit requirement was raised from 10 million won to 30 million won starting the 31st of last month, were pushed out of the top 80.
