"Afraid to Check Their Stock Accounts"... Nervous Retail Investors Pull Back on Trading

[Financial News] As volatility continues, retail investors are growing increasingly cautious. With trading volume falling to its lowest level this year, some say KOSPI has lost momentum.
According to the Korea Exchange on the 20th, average daily KOSPI trading value for this month, from Aug. 3 to 19, came to 26.1942 trillion won. That is the lowest level so far this year.
From January through April, average daily KOSPI trading value ranged between 27 trillion won and 32 trillion won. Then, as the index surged sharply in May and June, daily trading exceeded 50 trillion won. But after the end of June, the index began to fall steeply, and trading value declined as well. Last month, it dropped to 36.8745 trillion won. This month, however, it has fallen below the 30 trillion won mark. Compared with the bullish market in May and June, trading value has roughly halved in just over two months.
In particular, trading value stood at 19.0121 trillion won on the 10th. That was the second-lowest level this year, after Jan. 2, the first trading day of the year, when it came to 17.5218 trillion won.
Brokerage analysts point to worsening sentiment among individual investors. They say retail investors, who drove the sharp increase in trading volume in the first half of the year, may be exhausted after last month's market plunge and losses from leveraged bets.
In fact, even when the index recently rebounded, individual investors moved to sell and cash out their holdings. From the 12th to the 14th, KOSPI rose 9.96% from 6,345.33 to 6,977.94. But retail investors sold 851.61 billion won over the three trading days.
Experts say investors remain uneasy after the sharp decline and volatile market conditions. Heo Jae-hwan, a researcher at Eugene Investment & Securities, said, "Although the index has recently rebounded, it is difficult to see this as a trend reversal accompanied by a recovery in investor sentiment." He added, "This shows that investors are still uneasy."
He also said, "Expectations for the semiconductor sector are high, but upward revisions to earnings forecasts for semiconductor companies have also slowed compared with before. The U.S. stock market is also feeling pressure from higher interest rates."
Looking ahead, analysts say foreign capital flows will be key if KOSPI is to move past the volatile phase and extend its gains. Foreign investors posted net purchases of 949.15 billion won for five straight trading days in the KOSPI market from the 11th to the 18th. But as KOSPI plunged on the day, they turned to net sales of 344.51 billion won.
Lee Jae-won, a researcher at Yuanta Securities Korea Co., Ltd., said, "Whenever uncertainty eased, foreign investors led the index higher with net buying of major semiconductor stocks." He added, "For KOSPI to rise, it is important for foreign investors to return to sustained net buying."
[email protected] Han Young-joon Reporter