Upper-limit closings down 52% from January; new 52-week highs also shrink sharply

Fresh capital inflows slow as large-cap concentration deepens, squeezing small and mid-caps

A view of the dealing room at Hana Bank in Seoul. [Yonhap]
A view of the dealing room at Hana Bank in Seoul. [Yonhap]

The number of stocks hitting their daily upper price limit has fallen to less than half the January level, as South Korean equities have drifted in a narrow range since a sharp sell-off in July.

According to Korea Exchange, the total number of stocks that closed at their upper limit from the start of this month through Wednesday stood at 112 — 17 on the Kospi and 95 on Kosdaq. That is 52 percent fewer than the 234 stocks that hit the upper limit in January.

Compared with July, when market volatility surged to record levels and 261 stocks closed at their upper limit, the figure has dropped 57 percent.

Breaking down the Kospi figures by month, upper-limit closings rose from 33 in January to 38 in February and 47 in March. The count continued climbing — 46 in April, 52 in May and 56 in June — before peaking at 68 in July, the highest monthly total this year.

The number then fell sharply to 37 in August as volatility eased, and has since dropped further to 17 so far this month.

Kosdaq has followed a similar pattern. Upper-limit closings on the junior market totaled 95 so far this month, well below the peak of 223 in April and the 140 recorded in August.

However, downside volatility has not eased in tandem.

The number of stocks closing at their lower limit this month reached 14 — one on the Kospi and 13 on Kosdaq — already surpassing the 12 recorded for all of last month. The figure is also more than double the five lower-limit closings seen in January.

The Kospi has climbed from the 4,000 range at the start of the year to above 7,000, but the rally has remained concentrated in a handful of large-cap names rather than broadening across the market. Aggressive buying in individual stocks — particularly semiconductor names such as Samsung Electronics and SK hynix — has notably weakened.

The trend in 52-week high closings tells a similar story.

Through Monday, the number of Kospi stocks closing at a 52-week high jumped from 25 in January to 207 in February, reflecting a period when the index was rising steeply and buying spread across a wide range of stocks.

The count then retreated to 145 in April and 127 in May, before shrinking to 31 in August and just 26 so far this month.

On Kosdaq, 52-week high closings peaked at 256 in April and 243 in May, then fell sharply to 25 in July. The figure recovered slightly to 44 in August but has remained at 42 so far this month.

By contrast, 52-week low closings over the same period far outnumbered new highs — 73 stocks on the Kospi and 171 on Kosdaq.

Heo Jae-hwan, a researcher at Eugene Investment & Securities, told Yonhap that money sitting in banks and similar instruments flowed aggressively into equities as the index rose in the first half of the year, but that fresh inflows have slowed since June and July, with existing funds rotating among individual stocks rather than expanding the market's breadth.

On the relatively muted moves in individual stocks, he said that when interest rates have risen sharply, small and mid-cap companies with comparatively weaker balance sheets inevitably face greater pressure.


yuni@heraldcorp.com