Employees work at the dealing room of Hana Bank's headquarters in Jung-gu, Seoul, on Monday. [Yonhap]
Employees work at the dealing room of Hana Bank's headquarters in Jung-gu, Seoul, on Monday. [Yonhap]

The buying frenzy among retail investors, long concentrated on the Kospi, spilled over into Kosdaq in August as the blue-chip index lost momentum. After net selling Kosdaq the previous month, retail investors swung to net purchases of more than 2 trillion won ($1.46 billion) in August, emerging as the primary force driving the secondary market's rally. Their buying also spread well beyond semiconductors into entertainment, biotech and robotics stocks, broadening the rally's base across Kosdaq.

Korea Exchange data released Tuesday showed retail investors made net purchases of 2.16 trillion won on Kosdaq during August. Foreign and institutional investors net sold 1.84 trillion won and 364.7 billion won, respectively, leaving individuals as the dominant buyers. The shift was sharp: as recently as July, retail investors had been net sellers on Kosdaq to the tune of 333.5 billion won.

The scale of retail buying on Kosdaq stands out even more when weighed against the size difference between the two markets. At the end of August, Kospi's market cap stood at 5,620 trillion won — roughly 12 times Kosdaq's 467 trillion won. Yet retail net purchases on Kosdaq reached 2.16 trillion won, about 60 percent of the 3.24 trillion won recorded on Kospi over the same period.

Kosdaq also outperformed Kospi by a wide margin in August. The Kosdaq index climbed roughly 16 percent, rising from 719.76 at the end of July to 834.29 at the end of August. Kospi advanced 3.40 percent over the same stretch, moving from 6,595.45 to 6,820.02 — leaving Kosdaq ahead by 12.51 percentage points.

Retail buying on Kosdaq fanned out well beyond semiconductor names. The top stocks by individual net purchases in August included Jeju Semiconductor at 111.8 billion won, JYP Entertainment at 79.5 billion won, Hana Micron at 66.9 billion won, VM at 64.3 billion won, Kolon TissueGene at 62.2 billion won, Taihan Fiberoptics at 60.4 billion won, RFHIC at 58.8 billion won, Cosmo Robotics at 56.8 billion won, Robotis at 52.7 billion won and TES at 51.5 billion won. While semiconductor and semiconductor-equipment stocks still made up a large share of the list, buying extended into entertainment, biotech, fiber-optic and communications equipment, and robotics.

Several stocks retail investors bought also outpaced the broader Kosdaq gain. Jeju Semiconductor rose 20.1 percent from the end of July to the end of August, Hana Micron gained 19.7 percent and Taihan Fiberoptics surged 63.7 percent — all topping Kosdaq's 15.91 percent advance over the same period.

The contrast with Kospi buying patterns underscores how much broader Kosdaq's rally was. On Kospi, retail net purchases were dominated by large-cap semiconductor and electronics names: Samsung Electronics led at 2.04 trillion won, followed by Samsung Electro-Mechanics at 1.33 trillion won, Samsung Electronics preferred shares at 1.18 trillion won and SK hynix at 1.07 trillion won. Overseas-index ETFs also ranked high, with the TIGER US S&P500 ETF at 608.6 billion won, the KODEX US NASDAQ 100 ETF at 365.8 billion won and the KODEX US S&P500 ETF at 339.1 billion won. On Kospi, retail buying was anchored firmly in large semiconductor stocks and ETFs; on Kosdaq, it spread across a far wider range of sectors.

Anticipated initial public offerings in the second half of the year are seen as another factor that could sustain retail interest in Kosdaq. Expectations for major listings rose after the government finalized reforms to its dual-listing rules in August. The number of preliminary listing applications on Kosdaq fell to six from 15 in July, but seven companies — including Skylabs, Neo Sapiens, Wiseplanet Company and Bigwave Robotics — have demand-forecast and public subscription schedules lined up this month.

"Given that conditions favorable to Kosdaq are likely to take shape — driven by the refinement of the Kosdaq promotion-and-relegation policy and the launch of the second National Growth Fund — we maintain a positive stance on the IPO market in the second half," said Yoon Cheol-hwan, a researcher at Korea Investment & Securities.


kacew@heraldcorp.com