Mr. Park (34), an office worker, looks at the mobile trading system (MTS) all day these days. The domestic stock market is on the rise, and the secondary battery stocks that Mr. Park bought in the second quarter (April-June) are running around every day. Mr. Park said, “It rises more because it is a meme stock that was posted on a stock-related social network service (SNS) in April. He only believes in the words, “now is the cheapest”, and after investing, he became a life of anxiety. Concerns about being in a position of “FOMO (fear of being left behind or being alienated)” were also driven into “don’t ask investment.”
In the domestic stock market since July, the number of investors complaining of ‘FOMO syndrome’ like Park has increased dramatically. In stock discussion forums on Internet portal sites, you can easily see posts such as “I don’t know if I’m always behind” or “I feel depressed because the stock price has gone up while I was looking at the entry point.” Ants flocked to the stock market, and debt (investment in debt) increased again.
Extreme volatility was also seen due to the concentration of secondary batteries. Experts unanimously said that they should be wary of buying and avoiding ‘Fomo’.
◇Second battery stocks ranked 1st, 4th, 7th, and 9th in rate of increase = According to the Korea Exchange on the 31st, the stock that rose the most in the domestic stock market in July was counted as Geumyang. It soared 199.62% in one month. It is interpreted that the share price soared thanks to the news of the construction of new secondary battery facilities.
Looking at the growth rate of all stocks in the domestic stock market, LS Networks (142.60%) and POSCO DX (127.87%) ranked 4th and 7th respectively, which are related to secondary batteries. In ninth place was Posco International, which rose 126.10% from 39,850 won at the beginning of the month to 90,100 won that day. These companies are grouped under the secondary battery theme as expectations for expansion of the secondary battery material business are reflected.
Due to the amount of profit taking, eco group stocks were pushed back in the rankings. Ecopro BM ranked 24th with 68.27%, and Ecopro ranked 29th with 60.08%.
As investors flocked to secondary batteries, the stock market plummeted. According to Meritz Securities, in the past, the proportion of industries suffering from supply-demand bias in the total trading volume of the domestic stock market reached its highest level at around 30%, but in the case of secondary batteries, it was found to have surpassed the 40% level.
As the demand for profit-taking increased due to the surge in stock prices of secondary battery stocks, a large amount of funds were withdrawn from equity funds. According to Yuanta Securities, there was a net outflow of 1.5 trillion won from domestic stock funds from the 3rd to the 26th of this month.
The trading volume was also close to an all-time high. According to the Korea Exchange, the average trading value of the entire KOSPI and KOSDAQ in July was 27.22 trillion won, up about 41% from June (19.127 trillion won).
◇ Ants flock to secondary batteries = Investor deposits, which are standby funds in the stock market, also increased by about 4 trillion won in one month. According to the Korea Financial Investment Association, as of the 27th, investor deposits recorded 58.199 trillion won. On the 28th, the size of debt investment in the stock market increased to 10.1179 trillion won. It is in the 10 trillion won range for two consecutive days.
In the stock market, most of the advice is concerned about the sharp rise led by secondary batteries. According to the Korea Exchange’s market warning system, the number of stocks with caution and warning is increasing recently. In particular, Kumyang and POSCO DX were classified as investment warning stocks that cannot be used for credit. Kim Dae-joon, a researcher at Korea Investment & Securities, predicted that “the stock price volatility of the secondary battery theme will continue for the time being.”
However, he said, “If the market trend goes against the secondary battery theme, it is an uneasy factor that can cause significant losses.” In a situation where voices of concern about overheating are rising, there is no need to watch stocks that have raised investment warnings.”