A significant shift in investment has been observed towards sectors like secondary batteries. (Image courtesy of Yonhap)
SEOUL, Jan. 3 (Korea Bizwire) – Following the Korean government’s announcement that it would ease the capital gains tax on stocks, a significant shift in investment has been observed towards sectors like secondary batteries.
According to the Korea Exchange, since the government’s announcement that it would relax the threshold for imposing transfer taxes from the existing 1 billion won to 5 billion won on December 21, there has been a notable increase in individual investors’ net purchases, particularly in the last five trading days of the month.
DS Dansuk, a newly listed company and the last public offering of last year, topped the list of stocks with the highest net purchases by individual investors, totaling approximately 308 billion won. The company garnered significant attention with its stock price skyrocketing 300% on its first trading day.
Doosan Robotics, another newly listed company from October last year, also saw significant buying from individual investors, ranking tenth in net purchases, amounting to 38 billion won.
The secondary battery sector, in particular, received considerable attention from individual investors. EcoPro and EcoPro BM from the EcoPro Group, as well as Kumyang and LG Energy Solution were among the top 10 net purchased stocks in this category.
Although not in the top 10, individuals also heavily invested in other secondary battery stocks like Hydro Lithium and LG Chem during this period.
Kim Ji-san of Kiwoom Securities explained that the easing of capital gains tax led to a reduced shock in supply and demand typically seen at year-end for tax avoidance. This effect was particularly pronounced in the secondary battery sector, which is favored by individual investors.
However, there are concerns about the excessive concentration of individual investments in the secondary battery sector, compounded by the lifting of the short-selling ban and the tax easing.
The securities industry has recently advised reducing investment in this sector due to concerns over a slowdown in electric vehicle demand, declining battery prices, overvaluation, and potential changes in the Inflation Reduction Act (IRA) following the U.S. presidential elections in the second half of this year.
A market insider expressed concern that this concentration in the secondary battery market, driven by individual investors who experienced unusually high returns last year without much consideration for fundamentals, could increase market volatility.
M. H. Lee (mhlee@koreabizwire.com)
