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Korean retail investors lose big on stocks

June 3, 2016 - 10:31 By 임정요

South Korean retail investors have suffered big losses from their stock investments this year, while institutions and foreigners have performed relatively well, industry data showed Friday.

Retail investors posted an average investment return of minus 12.83 percent on their top 10 net-buy issues between Jan. 1 and Wednesday, compared with the 1.09 percent return rate for the benchmark Korea Composite Stock Price Index over the cited period, according to the data.


Analysts said retail investors seem to have lost their money because they loaded up on Samsung C&T Corp., the fashion and trading arm of South Korea's top conglomerate Samsung Group, whose share price has gone downhill this year.

Over the cited period, retail investors bought a net 900 billion won ($758 million) worth of Samsung C&T shares. The company closed at 114,000 won on the Seoul bourse Thursday, down a whopping 18.6 percent from 140,000 won on Dec. 30, the last trading day of 2015. That translates into a negative return of 15 percent.

"Many investors poured money into Samsung C&T because of its appeal as Samsung's virtual holding company rather than its fundamentals," said Kim Se-chan, a researcher at Daishin Securities Co.

Last year, Samsung C&T was formed out of a merger between then Samsung C&T and Cheil Industries to become Samsung's de facto holding firm. The merger was part of the group's efforts to streamline its ownership structure through big shakeups of its affiliates.

Retail investors also hemorrhaged from the remaining nine stocks, posting negative returns from investment in six issues.

In contrast, the comparable average return rate for institutional investors came to 6.6 percent, with the figure for offshore investors standing at 1.07 percent, according to the data. (Yonhap)