Investors Shift to KOSPI Amid Semiconductor Rally, KOSDAQ Margin Balance Falls Below 10 Trillion Won

As the artificial intelligence (AI) semiconductor rally continues, individual investors are concentrating their leveraged investment funds in large-cap stocks on the KOSPI. With strong performances from Samsung Electronics and SK Hynix, margin trading balances on the KOSPI have risen, while those on the KOSDAQ have fallen below 10 trillion won.
According to the Korea Financial Investment Association, as of May 28, the margin trading balance on the KOSPI was recorded at 27.184 trillion won, an increase of 2.367 trillion won from 24.816 trillion won on May 4.
In contrast, the KOSDAQ margin balance decreased from 11.022 trillion won to 9.846 trillion won during the same period, falling below the 10 trillion won mark.
Until early May, both the KOSPI and KOSDAQ margin balances were on the rise. However, since mid-May, the KOSPI margin balance has continued to grow while the KOSDAQ balance has declined, highlighting a clear divergence.
Experts believe that the concentration of investments in the semiconductor sector due to the expansion of AI investments has prompted this shift in individual investors' funds.
Kim Min-ki, a researcher at the Capital Market Research Institute, stated, "Recently, Samsung Electronics and SK Hynix have effectively driven the index up, but there are not many stocks that have actually risen. Individual investors are actively net buying on the KOSPI while selling on the KOSDAQ, leading to a movement of funds from KOSDAQ to KOSPI."
He added, "In past liquidity-driven markets, funds tended to spread from large-cap to small-cap stocks, but currently, liquidity is concentrated solely on the AI and semiconductor themes. This trend is reflected in margin trading, with KOSPI balances increasing and KOSDAQ balances decreasing."
The influence of the semiconductor sector on the stock market is growing stronger.
According to Heo Jae-hwan, a researcher at Eugene Investment & Securities, the market capitalization share of domestic semiconductors has expanded from 25% in June of last year to 54% recently. It is also projected that semiconductors will account for the high 60% range of the total operating profit of the KOSPI this year.
Heo noted, "The combined market capitalization of the three major memory semiconductor companies has surpassed 1 trillion dollars, yet their price-to-earnings ratios (PER) based on 12-month expected earnings remain at 6 to 10 times. This indicates a high investment appeal for the semiconductor sector."
In the KOSDAQ market, a trend of capital outflow is also evident. The KOSDAQ index fell to 1,074.80 on May 29 and continued to decline, closing at 1,050.03. On that day, institutions continued to net sell major semiconductor-related stocks such as Rino Industrial, EoTechnics, Wonik IPS, and Juseong Engineering.
Market analysts suggest that the ongoing global AI investment expansion and expectations for improved semiconductor performance may sustain the current trend of capital concentration for the time being.
Kim remarked, "The global AI infrastructure investment cycle, led by companies like NVIDIA, Microsoft, and Google, remains strong, and the earnings outlook for Samsung Electronics and SK Hynix is being revised upward. Unless there are clear positive developments in other sectors, the current movement of funds is likely to continue in the short term."
However, he cautioned, "The excessive concentration of leveraged funds in specific sectors and the rapid rise in stock prices could pose risks to the overall stock market in the future. As this concentration deepens, it is essential to be mindful of the potential for increased volatility."

* This article has been translated by AI.

Yang Boyeon