Retail Investors Who Bought Stocks During Volatile Markets Turn to Heavy Selling at Record Highs; Last Month Saw the Largest Net Sales on Record

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[The Financial News] Retail investors who had been scooping up stocks when the market was shaken by the Middle East war turned into record sellers as the KOSPI Composite Index rallied to all-time highs. As the index extended its sharp gains, concerns about a top and a growing desire to lock in profits appear to have driven the selling.
According to the Korea Exchange (KRX) on the 4th, retail investors posted a net sell of 479.45 billion won in the main board market that day. The heavy selling continued after they recorded the largest monthly net sell on record last month.
Retail investors net sold 15.5228 trillion won in the KOSPI Composite Index market last month, the largest monthly outflow ever. That far exceeded the previous record of 10.4858 trillion won in net selling in September last year.
The bigger the KOSPI Composite Index's gains, the more aggressively retail investors sold. On the 1st of last month, when the index jumped 8.44%, they net sold 376.28 billion won. On the 8th, when the index rose 6.87%, they posted a net sell of 541.62 billion won.
Retail investors have shown a quick response, buying stocks aggressively in falling markets and selling them during rallies. In March, when the domestic market was badly rattled by the impact of the Middle East war, they net bought 33.569 trillion won, marking the largest monthly buying spree on record. On March 23, they also posted a daily net buy of 702.9 billion won, setting a new record for the largest daily net purchase.
In particular, retail selling was concentrated in Samsung Electronics and SK hynix, both of which have continued to rise. Last month, the combined net selling of Samsung Electronics at 8.1078 trillion won and SK hynix at 3.0413 trillion won came to 11.1491 trillion won, accounting for 71.43% of the total.
Brokerage analysts are forecasting strong earnings for Samsung Electronics and SK hynix, but they also warn that investors should be cautious about slowing profit growth. Jungho Shin, head of the research center at LS Securities, said, "Looking at Samsung Electronics as the benchmark, the momentum in operating profit growth is expected to peak in the second quarter this year and then peak out." He added, "The stock price already reflects higher earnings levels, and given the slowdown in annual growth in big tech capex, the upside is likely to be limited."
Lee Sang-yeon, a researcher at Shinyoung Securities, said, "Since the market has already priced in a significant portion of earnings expectations, it is necessary to keep in mind the possibility of a short-term correction driven by profit-taking." He added, "On the macro side as well, high oil prices and the resulting inflation burden have not been fully resolved, so they could still act as a potential risk."
A temporary pullback may be unavoidable, but some analysts expect the upward trend to continue. Han Ji-young, a researcher at KIWOOM Securities, said, "There may be temporary correction pressure as the market takes a breather after last month's sharp surge and due to short-term fatigue." She added, "However, given upside factors such as the possibility of an upward revision in KOSPI earnings consensus and a potential breakthrough in negotiations between the United States of America and Iran, the KOSPI Composite Index is likely to keep setting new highs."
jisseo@fnnews.com Seominji Reporter