[아듀 증권 2020] ‘Donghak ants’ supported the domestic stock market… The heyday of individual investors

-In 2020, the securities industry had the same year as a roller coaster. The domestic stock market, which had crashed in the aftermath of Corona 19 earlier this year, broke the long-term box zone due to the enormous inflow of private investor funds, and broke the V-shaped rapid rebound, breaking the record high.

Domestic securities companies also had a hard time due to incomplete sales of various private equity funds and the aftermath of regulations from the financial authorities, but on the one hand, thanks to the’Donghak ant’, they recorded more than expected performance.

Accordingly, the Korea Financial Newspaper is publishing a series of planning over two weeks that retraces major events and issues in the securities industry this year.
2020 was a year when individual investors’ performance was more prominent than ever.

Individual investors have been pushed by foreign and institutional investors so far, and have not been able to exert much power. But this year, they succeeded in putting the domestic stock market on track by taking the stocks they sold alone.

The so-called’Donghak Ant Movement’, the flow of stock investment by individual investors, has risen markedly since last February, when the stock price fell in the aftermath of the novel coronavirus infection (Corona 19).

Donghak ant is a term likened to’Donghak-gun that resisted foreign powers’ to individual investors who received this quantity when the domestic stock market collapsed due to the dominant sell-off of foreigners due to the Corona 19 incident, and rather quickly recovered the domestic stock market.

In particular, it was only up to individual investors that supported the stock market in the situation where the KOSPI index plunged to the 1457 line, the lowest level of the year in March, and the KOSPI market cap collapsed at 1,000 trillion won. Those who have steadily continued their net buying streak are evaluated as the No. 1 contributors who made a new history of the 2700 era of the KOSPI index written.

◇’Plate’ in the Korean stock market… Inflow of individual investors exceeded KRW 63 trillion

According to the Korea Exchange on the 20th, the funds of individual fighters that flowed into the domestic stock market this year amounted to about 63.5 trillion won.

Until the 14th of this year, individual investors net purchases worth 46,560 billion won in the KOSPI market and 16.93 trillion won in the KOSDAQ market. This is the net purchase of a total of 63,49 trillion won by combining the KOSPI and KOSDAQ markets.

This is in contrast to the fact that individual investors net sold 11,801.2 billion won in the KOSPI market during the same period last year.

Investor deposits, which are held by the stock market, also increased significantly. Investor deposits are money that customers leave with a brokerage company to buy stocks or are not looking for stocks after selling them, and they are waiting funds that can be put into the stock market at any time along with the Money Market Fund (MMF).

According to the Financial Investment Association, investor deposits as of the 14th recorded 61,2807 billion won, a whopping 33,955.9 billion won from the end of last year (27,393.3 billion won).

The size of the so-called’seohak ants’ investing in overseas stocks also surged. According to Savero of the Korea Securities Depository, the net purchase amount of overseas stocks until the 9th of this year was about 18.95.86 million dollars (about 19,7154 billion won).

Compared to $1.57 billion in 2018 (1,7108 billion won) and $2.511.11 million last year (2,735.8 billion won), this is an explosive increase. This is interpreted as the fact that the domestic stock market continued to fluctuate unprecedentedly due to the Corona 19 incident this year, and individual investors who were aiming to buy low-priced stocks started investing in stocks.

In particular, it is analyzed that as the world enters the era of zero interest rates, huge amounts of commercial assets have moved from deposits and real estate to the stock market, showing a strong liquidity market.

According to Bloomberg News of the United States, in fact, out of 25 indexes in major countries around the world, the KOSDAQ ranked first and the KOSPI ranked fourth this year.

Kim Hak-gyun, head of the research center of Shinyoung Securities, said, “The performance of the Korean stock market was outstanding despite the overall rebound of the global stock market this year. This was a clear comparative advantage in the prevention of Corona 19, the propaganda of Korea’s leading companies, and the aggressive influx of individual investors. Because” he explained.

The increase in the share of stock investment by individual investors was positively evaluated.

“The amount of direct investment fund inflow from individual investors considering trading this year is about 84 trillion won.” “There is a myth in the stock market that’individuals are good at amnesty’, and this year’s rapid rebound was thoroughly led by individual investors. It is different from the past in that regard.”

He also said, “In the past, the stock investment craze of individual investors has always appeared near the peak after a long-term increase in stock prices. This year is the only case of increasing the share of stocks from the bottom, not from the high-tech sector. It is compared to the past in that it was continued.”

◇ Successive’Donghak Ant’s Victory’, such as short selling and strengthening requirements for large shareholders

It is not only in the stock market that Donghak ants have won. This year, individual investors succeeded in carrying out their opinions, showing considerable influence on the government’s policy decisions related to the stock market.

In particular, short selling, which has been regarded as the’public number 1’by individual investors, was banned until next March. The strong influence of the individual’s breath on the domestic stock market has forced the financial authorities as well as the politicians to watch the attention of ant investors.

The government previously decided to ban short selling for six months until September 15 to alleviate the sharp stock market volatility caused by the Corona 19 incident in March.

However, the government extended the ban on short selling until March next year, as individual investors demanded that the ban on short selling should be extended before September, when the temporary measure ends. In addition, it promised to review measures to improve various systems and strengthen punishment for illegal short selling.

The pressure from Donghak ants, who have been demanding effective improvement measures against short selling, has actually led to system improvement. On the 2nd, the National Assembly passed a bill to amend the Capital Markets Act, aimed at imposing fines on illegal short selling and strengthening criminal penalties.

The main contents of the resolution of the Capital Markets Act are: △Establishment of legal basis for restriction of short selling of borrowings △Prohibition of participation in capital increase by borrowers, △Establishment of obligation to store and report securities lending transaction △Criminal punishment for illegal short selling.

The reinforcement of the requirement for large shareholders, which was the’hot potato’ in the stock market this year, was eventually eliminated in response to the opposition of individual investors.

The Ministry of Strategy and Finance initially attempted to lower the stock holdings standard, which determines whether the stockholders are subject to stock transfer tax, from 1 billion won to 300 million won. However, in November, taking into account the fierce backlash from Donghak ants, it agreed to postpone the reinforcement of the current major shareholder requirements until 2023.

Accordingly, the word’Donghak ant’s victory’ is coming out in the securities industry. It can be interpreted that the status of individual investors has increased significantly than before in that the implementation of the finalized enforcement ordinance itself has been postponed.

An official in the financial investment industry said, “This year was a year when individual investors’ active advancement into the stock market was outstanding. We evaluate this as a positive phenomenon under the assumption that this trend will not end in the short term but will continue in the long term.”

He predicted that “in the end, only when money enters the capital market, companies can survive, and only when companies survive, the national economy can develop,” he said. “Individual investors’ stock investment will be an important channel that connects them.”

Reporter Seungbin Hong [email protected]

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