The South Korean stock market fell too badly, and South Korean retail investors also trade US stocks, and they love Tesla the most

Korean retail investor are flocking to the US stock market, betting that the stock market will continue to rise during Donald Trump's second term as president, and feeling frustrated with the poor performance of the South Korean stock market in recent years.

South Korean investors love Tesla the most

According to the Financial Times, as of the end of 2024, South Korean investors held a record $11.21 billion in U.S. stocks, up 65% from the same period last year. In 2024, they will net sell KRW 5.4 trillion (about $3.6 billion) of Kospi stocks, which will fall 10% in 2024 and be one of the few stock markets to fall annually.

Tesla is the favorite overseas stock of Korean investors, which also prompted Elon Musk to post on X in July, calling Koreans "smart people". As of last month, the total value of Tesla stocks held by individual investors in Korea amounted to 24.5 billion US dollars, followed by Nvidia's 12.1 billion US dollars, Apple's 4.9 billion US dollars, and Microsoft's 3.2 billion US dollars.

US stocks frequently hit new highs, but Korean stocks are performing poorly

According to data from Morgan Stanley Capital International (MSCI), the 10-year total shareholder annualized return rate in Korea is only 5%, in Japan it is 10%, and in the United States it is 13%.

With the recent political turmoil in South Korea and concerns over the potential increase in trade tariffs and reduction of subsidies for Korean battery manufacturers following Trump's election, the shift of retail investors towards the US stock market this year may become more pronounced. Samsung's stock price dropped to a four-year low in November, with the company occupying 18% of the Kospi index in South Korea.

About two-thirds of the companies in the Kospi index have a price-to-book ratio (P/B ratio) of less than 1, which means their market value is lower than the declared value of their net assets, indicating the possibility of significant undervaluation of these companies.

In order to boost the sluggish stock market, the South Korean authorities have launched a new index under the Value Enhancement Plan, focusing on companies that improve capital efficiency. They also promised tax incentives for companies that increase shareholder returns. At the same time, the originally planned capital gains tax has been canceled to appease disgruntled investors. However, it seems that the effect is not satisfactory at present.

In addition to the US stock market, South Korea is also a well-known country for trading cryptocurrencies. In addition to young people who want to get rich overnight, many middle-aged and elderly people are crazily investing their retirement funds, hoping to have a worry-free life through cryptocurrency trading.

("I don't want to be a beggar anymore" South Korea's economic downturn, turning to speculation, middle-aged and elderly people are also crazy about investing their retirement savings)

The South Korean stock market fell too hard. South Korean retail investors traded coins and US stocks, and loved Tesla, which first appeared in Chain News ABMedia.