Retail Investors Dump Samsung, SK Hynix After Kospi Record, Rotate Into Naver, HYBE

How to Invest in a Bull Market

Retail Traders Piled Into Korea’s Two Chip Giants

They Took Profits as the Kospi Broke Its Previous Peak

HYBE, Naver and Hyundai Engineering & Construction Drew Buying

Foreign Investors Averaged Up on Large Caps

They Bought Aggressively as the Index Climbed

South Korea’s benchmark Kospi index has shrugged off risks from the Middle East conflict and entered the 6,400 era. The index has surged 27% this month, reviving its run toward 7,000. As the rally gathers pace, retail and foreign investors are pursuing sharply different strategies. Foreign investors are averaging up on the large-cap semiconductor and nuclear-power names driving the market higher. Retail traders, by contrast, are taking profits and rotating into relatively undervalued stocks.

Retail Investors Rotate as Chip Stocks Surge

The Kospi rose 0.46% from the previous session to close at 6,417.93 on April 22, according to the Korea Exchange. That broke the previous record of 6,388.47 set a day earlier and extended the rally. A second round of ceasefire talks between the US and Iran failed, but the setback did little to rattle markets as investors focused on President Donald Trump’s recurring “TACO” pattern, short for “Trump Always Chickens Out.” The Kosdaq also closed 0.18% higher at 1,181.12.

The Kospi’s gains have been led by Korea’s two biggest chipmakers, but retail investors have been selling both stocks. This month, individuals were net sellers of Samsung Electronics by 7.3829 trillion won and SK Hynix by 3.7369 trillion won. That means they sold more than 11 trillion won of the two stocks combined. Retail investors had bought both names heavily last month, when war risks left the Kospi stuck in a 5,000-point range. As the benchmark broke above its previous high this month, they moved quickly to lock in gains. Doosan Enerbility, another driver of the rally, was also among the most heavily sold names at 1.3152 trillion won, along with Samsung SDI at 1.0549 trillion won.

Retail investors instead turned to stocks they viewed as undervalued. Their biggest net purchases this month were LS Electric at 591.7 billion won, HYBE at 376.3 billion won and Naver at 370.6 billion won. Except for LS Electric, those stocks have posted negative returns over the past three months. As of the April 22 close, HYBE and Naver were down 32.16% and 12.83%, respectively, from three months earlier. Higher costs tied to BTS contract renewals and weak competitiveness in artificial intelligence weighed on the shares. Rather than chase stocks that had already climbed sharply, retail investors appeared to be targeting names they saw as laggards or undervalued.

Foreign investors, meanwhile, have kept adding to semiconductor stocks. Their top net purchase this month was SK Hynix at 1.9295 trillion won over the past three weeks, according to the Korea Exchange. Samsung Electronics followed at 925.4 billion won, then Doosan Enerbility at 878.6 billion won. Foreign investors were net sellers of names heavily bought by individuals, including HD Hyundai Heavy Industries at 753.5 billion won and LS Electric at 580.8 billion won. In effect, foreigners have been buying what retail investors sold, while retail investors picked up what foreigners dumped.

Foreign Investors Bet on Further Index Gains

The split reflects different views of the market. “Foreign investors are betting on gains in the index itself, focusing on large-cap stocks ranked roughly in the top 20 to 30 by market value,” a securities-industry official said. Retail investors, the person added, are trying to maximize returns by switching out of large caps, where valuation pressure has grown, and into stocks that have fallen too much or have yet to rise as much.

The divergence is also visible in trading patterns. Recently, retail investors have tended to sell when the Kospi rises and buy when it falls. They are buying companies with lower valuations or recently depressed share prices at cheaper levels, then taking profits quickly after a rebound. Even on April 21, when the Kospi topped 6,300 for the first time since the war began, individuals sold 1.9204 trillion won of shares. Foreign investors, by contrast, stepped up their buying with purchases of more than 1 trillion won as the market advanced.

Still, the brokerage industry is warning against blindly chasing undervalued stocks. Epic AI, an AI-based investment information service, said securities firms that published reports on HYBE and Naver this month all lowered their target prices. They maintained buy ratings, but given the tendency of South Korean brokerages to avoid issuing sell or neutral calls, the cuts suggest the stocks have become less attractive.

Lee Sun-a, Korea Economic Daily reporter suna@hankyung.com