‘I Put in My Home-Buying Savings and Lost $14,400’: BBC Highlights South Korea’s Retail Investors

Foreign media outlets have spotlighted South Korean retail investors who suffered steep losses amid sharp swings in the domestic stock market after the Kospi posted one of its worst selloffs on record last month.

The BBC and other foreign media on Aug. 13 profiled individual investors who lost large sums after betting heavily on major South Korean technology stocks including SK Hynix and Samsung Electronics.

According to the report, a banker identified only by his surname, Kim, who is set to marry later this year, invested money he had saved to buy a home in tech stocks and lost about 20 million won ($14,400) last month. The value of his holdings fell about 25% in July alone. “I’ll have to work really hard to make up for the losses,” he said. He added that some people around him were in even more desperate situations after going all-in with their savings.

Another investor surnamed Kim, who invested in SK Hynix, also took heavy losses. He put half of a bonus he received from work earlier this year into the chipmaker’s shares. The stock at one point rose to four times his purchase price, but later surrendered most of those gains. His holding, now worth about 300 million won ($216,000), has shrunk to roughly half its peak value.

An individual investor surnamed Park, who put most of his investable cash into Samsung Electronics shares, was in a similar position. His investment had at one point grown to 45 million won ($32,400), but fell sharply along with the stock price. “I was foolish to trust the Korean stock market,” Park said. “Now I think I have to take the long view. All I can do is wait.”

A college student surnamed Lee said he felt FOMO, or fear of missing out, as South Korean stocks surged in the first half and joined friends in buying SK Hynix. He purchased the stock as market enthusiasm grew so strong that some forecasts suggested SK Hynix could rise to 5 million won ($3,600) a share. “None of my friends had any investing experience, and none of us had properly studied investing before buying stocks,” he said.

The Kospi has recently been one of the more volatile major equity indexes in the world. It rose above 9,000 in mid-June, then plunged below 5,500 just five weeks later. As of Aug. 14, it was fluctuating around the 7,000 level.

Investment analyst Tobias Reger said the Kospi’s recent sharp selloff followed months of rapid gains and that some retail investors piled into stocks with borrowed money during the rally, showing signs of overheating. The BBC reported that individual investors using high leverage were hit even harder by the market slump.

Park Su-rim, Hankyung.com reporter paksr365@hankyung.com