“It’s Really Nerve-Racking”: SK Hynix Jumps 5.81%, but Retail Investors Remain on Edge

Wild Swings Deepen Investor Fatigue

SK Hynix Rebounds 5.81%, but Retail Anxiety Persists

Kospi Triggers 27 Sell Sidecars and 25 Buy Sidecars

SK Hynix shares rebounded, but anxiety among retail investors has yet to subside. The Kospi has swung sharply enough this year to trigger buy and sell sidecars 52 times, while speculation over a possible U.S. listing for subsidiary Solidigm has further shaken sentiment. With share-price volatility becoming extreme, some in the market are even warning that individual investors could leave the market.

According to EpicAI, an AI-based investment information platform, SK Hynix closed at 1.294 million won on October 21, up 5.81% from the previous session. The stock opened at 1.26 million won, up 3.03%, and extended its gains during the day. At one point, it traded at 1.329 million won, up 8.67%.

The rebound was driven in part by bargain buying after the previous day’s sharp drop. News that a Chinese company had ordered more than $35 billion of Nvidia products but may receive only 5% to 10% of that amount because of supply shortages also helped steady battered investor sentiment.

SpaceX’s third-quarter results, released early on October 21, also added support. Revenue jumped 161% from a year earlier, returning the company to profit. Elon Musk, SpaceX’s chief executive officer, said on a conference call that demand for artificial-intelligence computing far exceeds supply.

Better-than-expected earnings from U.S. AI server maker Super Micro Computer also lifted large-cap semiconductor shares. Preliminary customs data released the same day, showing South Korea’s exports for October 1-20 reached $61.6 billion, up 105% from a year earlier, added to the positive backdrop.

SK Hynix’s gain came during a broader rebound in the Kospi. The benchmark index closed at 5,735.66 on October 21, up 182.92 points, or 3.29%, from the previous session. It rose nearly 4.8% at one point, triggering a buy sidecar at 10:52 a.m.

The problem is that South Korea’s stock market has been lurching between steep gains and sharp losses almost every day, leaving SK Hynix investors increasingly fatigued. Even after a seven-session selloff from October 6 to October 15, when the Kospi’s cumulative drop reached 21%, the market continued to swing wildly from day to day. The index rebounded on October 16 and October 19, only to plunge 3.7% in the previous session and erase those two days of gains.

With the latest sidecar trigger, the cumulative number of sidecars activated this year on the benchmark stock market rose to 52. That includes 27 sell sidecars and 25 buy sidecars. The total is double the 26 recorded in all of 2008 during the global financial crisis and marks the highest annual tally since 2002. The frequent use of both buy and sell sidecars highlights the scale of volatility in South Korea’s stock market this year.

The volatile market is also showing signs of draining retail liquidity. According to the Korea Financial Investment Association, investor deposits stood at 90.2975 trillion won as of October 20. That extended a decline to six straight sessions beginning on October 12. Investor deposits are generally regarded as funds waiting to be put into stocks.

Uncertainty surrounding SK Hynix is also growing. Signs have emerged that the company may seek a Nasdaq listing for its U.S. sub-subsidiary Solidigm, raising concerns that the interests of existing shareholders could be undermined.

South Korea’s financial authorities recently said they view the issue as falling under duplicate-listing regulations. But that has not resolved the uncertainty, because it remains unclear whether domestic regulators have a legal basis to restrict an overseas listing. At the same time, a brokerage report said SK Hynix’s target price could rise as high as 4.7 million won, adding to confusion among retail investors.

One SK Hynix shareholder wrote on a stock discussion board that the share-price gain brought little comfort. “The stock went up, but I don’t feel good. I’m so worried it might plunge tomorrow that I don’t think I can sleep,” the investor wrote. “These days the volatility is so severe that just holding on is stressful.”

Another shareholder said losses had grown too large to exit after investing 70 million won sent by in-laws after strongly persuading them. “All day I keep checking the stock price on my mobile trading app,” the investor wrote. “It’s really nerve-racking.”

A senior executive at a Yeouido brokerage said the repeated roller-coaster trading was pushing retail investors’ psychological fatigue to a breaking point. When stock prices are driven more by flows and short-term sentiment than by earnings or fundamentals, investors focus on avoiding losses rather than pursuing returns and may ultimately choose to leave the market, the executive added. If retail inflows weaken, market liquidity and downside support could also erode, setting off another cycle of heightened volatility.

Kang Kyung-ju, Hankyung.com reporter memory@hankyung.com