‘I Put Away Money for a Home and Lost $14,400’: BBC Spotlights South Korean Retail Investors

Foreign media are focusing on South Korean retail investors who suffered heavy losses during last month’s historic Kospi selloff and sharp swings in the local stock market.

BBC and other outlets on August 13 highlighted individual investors who lost large sums after betting on major South Korean technology shares including SK Hynix and Samsung Electronics.

One bank employee surnamed Kim, who is set to marry later this year, invested money he had saved to buy a home in technology stocks and lost about 20 million won, or roughly $14,400, last month, the report said. The value of his holdings fell about 25% in July alone. “I’ll have to work really hard to make up for the losses,” Kim said. He added that some people around him had put in all their savings and were in far more desperate situations.

Another investor surnamed Kim, who bought SK Hynix, also suffered steep losses. He invested half of a work bonus he received earlier this year in the chipmaker’s shares. The stock at one point climbed to four times his purchase price, but later gave back most of those gains. His holding, now worth about 300 million won, or about $216,000, has shrunk to roughly half its peak value.

An individual investor surnamed Park, who put most of his available cash into Samsung Electronics shares, described a similar experience. His investment had once grown to 45 million won, or about $32,400, before falling sharply with the stock price. “I feel stupid for trusting the domestic stock market,” Park said. Now, he said, he has little choice but to take a long-term view and wait.

A college student surnamed Lee said he felt FOMO, or fear of missing out, as South Korean stocks surged in the first half, prompting him and his friends to buy SK Hynix. He entered the stock as market optimism swelled to the point that some forecasts said SK Hynix could rise to 5 million won, or about $3,600, a share. “None of my friends had investment experience, and none of us really studied investing properly before buying stocks,” Lee said.

The Kospi has recently ranked among the world’s more volatile major equity indexes. It climbed above 9,000 in mid-June, then tumbled below 5,500 just five weeks later. As of August 14, it was trading around the 7,000 level.

Investment analyst Tobias Regger said the recent sharp selloff in the Kospi followed months of rapid gains and showed signs of overheating, with some retail investors even borrowing money to buy stocks. The BBC said individuals using high leverage were being hit harder by the market downturn.

Park Su-rim, Hankyung.com reporter paksr365@hankyung.com