Sharp Rise in Stock Market... Number of Investment Risk Stocks Increased 2.5 Times

Kakao Pay, Hungkuk Fire Insurance, Etc.

Even Large-Cap Stocks Join In

Investment risk stocks are increasing rapidly. Analysts note that the stock market is overheating in the short term, leading to more 'speculative theme' stocks.

According to the Korea Exchange on the 1st, the number of newly designated investment caution stocks this year reached 1,321, up 20% from the same period last year (1,101 cases). The numbers of investment warning and investment risk stocks were counted at 205 and 15, respectively, compared to 130 and 6 during the same period last year.

The market alert system, which informs investors of investment risks, is divided into three stages: investment caution, warning, and risk. Stocks designated at the highest investment risk level face a one-day trading suspension. The Korea Exchange explained that the number of investment risk stocks has been increasing abnormally this year—while there were only 3 to 4 per quarter last year, 6 have already been designated in just the past month alone.

This year, several large-cap stocks have also been designated as investment risk or warning stocks, differing from previous instances where mostly thematic stocks on the KOSDAQ market were affected. On this day, Kakao Pay was designated as an investment risk stock and trading was suspended for one day. On both the 24th and 26th of last month, it had been designated as an investment warning and investment risk stock, respectively. Kakao Pay's market capitalization is ₩10,429,000,000,000. On the 30th of last month, Poongsan Corporation was designated as an investment warning stock. With the revaluation of its defense business, Poongsan's share price surged 107% over the past month. Poongsan’s market cap stands at about ₩3,500,000,000,000.

Lee Sung-hoon, a researcher at Kiwoom Securities, remarked, "Since the inauguration of the new government, the numbers of investment caution, warning, and risk stocks have risen sharply," adding, "Investors should be cautious with sectors where speculative funds could flow in, such as robotics and stablecoins."

Reporter: Park Ju-yeon grumpy_cat@hankyung.com