Retail investors became an influential force in the local financial market in the first quarter of 2020, with foreign and institutional investors cutting down in their activities due to the COVID-19 pandemic.
Massive buying of Korean stocks by retail investors offset the exodus of foreign investors from the market due to the pandemic.
In March, retail investors purchased 11.4 trillion won of stocks as foreigners sold stocks worth over 12.8 trillion won.
Retail investors also helped Shinhan Investment achieve a brokerage commission profit of 143.2 billion won in the first quarter, up 70.7 percent from the previous quarter.
KOSPI took a beating in March due to foreign binge selling, which retail investors identified as an opportunity to purchase promising stocks at a lower price.
Meritz Securities economist Kang Bong-joo observed that retail investors had exhibited their clout by engaging buying of local stocks worth more than 25 trillion won at the start of 2020 as foreigners sold over 19 trillion won. Consequently, retail investors have prevented the main bourse from collapsing further in March when the impact of the pandemic when virus-reached its peak.
In mid-March, the KOSPI dipped below the 1,500-mark, the first time since July 2009, as foreigners went on a selling spree due to fears over COVID-19.
The index has since recovered to surpass 1,900 points, closing at 1,947 Wednesday, a 0.7 percent improvement from the previous trading day.
The index has reached a high of around the 2,200-mark this year.
Kang added that the influence of retail investors would not be a temporary phenomenon as they are constantly eager to learn more about investment opportunities.


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