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Korean stocks end at highest level in 2 years as ants load up

Aug 05, 2020 (Gmt+09:00)

South Korean shares rallied for a second consecutive session on Wednesday, ending at the highest level in nearly two years, as individual investors snapped up bargains in the bio, batteries, Internet and games sectors.

The benchmark Kospi closed up 31.89 points, or 1.4%, at 2,311.86. The closing marks the highest since October 1, 2018. From the intraday low of 1,439.43 on March 19, when the world was gripped by fears of the COVID-19 pandemic, Korean shares have risen 61%.

Analysts say Seoul shares gained firm ground for two straight days on reports the U.S. is moving closer to rolling out stimulus measures to help the world’s top economy recover from pandemic jitters.

Individual investors scooped up a net 429 billion won on the main bourse on Wednesday. Foreigners offloaded 51.8 billion won, while institutions sold 363 billion won worth of shares.

The country’s retail investors, known as ‘ants,’ have become the biggest buying force since early this year, betting heavily on a recovery from the coronavirus-driven slump.

Buoyed by a deep retracement since the local market’s yearly low in mid-March and out of fears of missing out on further gains, the ‘ants’ were aggressively buying shares that foreign investors and domestic institutional investors dumped.

Some local media jokingly dubbed the heavy buying by the swarm of small investors the ‘Donghak Ants Movement’, a reference to the 19th century ‘Donghak Peasant Movement’, an attempt by peasants to revolt against the rich and foreign invaders.


Korean bio stocks emerged as the darling of the market as retail investors have blindly gobbled them up on speculative bets for COVID-19 treatments.

On Wednesday, Hanmi Pharmaceutical shot up by the daily limit of 30% to 360,500 won. Other bio and pharmaceutical firms were also among major gainers, with Samsung Biologics advancing 7.1% to 787,000 won and Celltrion rising 4.3% to 315,000 won.

The ants have also favored Internet-related shares as more people work remotely from home and shares in manufacturers of rechargeable batteries on belief that electric vehicles will take off once the global economy returns to normal after the fears of the coronavirus pandemic subside.

Samsung Biologics, Celltrion, LG Chem, Samsung SDI, Naver, Kakao and NC Soft saw their share prices almost double so far this year, raising bubble concerns with some unjustified price-earnings ratio figures.

While some analysts predict a short-term market correction, many others expect Korean shares to extend their gains over the mid-term, helped by government stimulus measures and the central bank’s easing monetary stance.

“A near-term market correction is unavoidable, but the Kospi will continue its uptrend as investors buy into 2021 profit outlooks for blue-chip shares,” said Lee Kyung-soo, head of research at Meritz Securities.

By Park Jae-Won

In-Soo Nam edited this article

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