Individual investor dreaming of ‘Kia’s jackpot’ with Apple cars, 1.5 trillion won “debt”

It is found that individual investors have bought Kia Motors (85,800 won, 900 1.1%) stocks in debt of over 1 trillion won this year. It means that expectations for a share price rise have been added to the collaboration with Apple, and it has even received a loan to invest. However, with the recent plunge in stock prices, losses are likely to be inevitable.

 

According to the securities industry on the 9th, Kia Motors' credit loan balance was 3.12 million shares as of the 8th. Compared to the beginning of last month, which was 1.18 million weeks, it has nearly tripled. In this year, Kia Motors' new credit loan amount has increased to 1.5 trillion won. This means that individual investors borrowed 1.5 trillion won from securities companies to buy Kia Motors stock. On the 5th, when Kia Motors' stock price peaked, new credit worth 300 billion won was received in one day.

On the 8th, when the stock price plummeted, credit loans worth 140 billion won were added. Credit transaction is when an investor borrows money from a securities company and invests in stocks as collateral. If the stock price rises, it can lead to high returns, but if the stock price falls, there is a risk of further loss. In particular, when the stock price falls, securities companies are forced to sell stocks, and'counter-trading' is executed.

 

The reason why individual investors started to trade on credit is Kia Motors' report on the production of Apple Car, which started in Korea in January. Kia Motors will produce it at its Georgia plant in the US, and it will receive an investment of 4 trillion won. Kia Motors' share price exceeded 100,000 won for the first time on the 5th. However, Kia Motors' stock price plummeted by nearly 15% as Kia Motors announced through a public announcement on the 8th that it is not proceeding with discussions on the development of autonomous vehicles with Apple.

 

The predictions of individual investors who aimed for the leverage effect through credit transactions were wrong. If Kia Motors' share price declines and the credit loan collateral ratio falls below a certain level, counter-selling is carried out and losses are confirmed. This is the disadvantage of credit transactions that do not become'buy and hold'.

 

There is also a growing concern about a stock price plunge due to counter trading. When a brokerage company trades in the opposite direction, it places a sell order at the lower limit of the closing price the day before. If Kia Motors' stocks, which are on a downtrend, are sold at a lower price due to counter trading, the possibility of a sharp decline cannot be ruled out.

 

Securities industry experts assessed that Kia Motors' growth potential is still high in the mid to long term, although there will be short-term stock price volatility due to issues such as Apple car collaboration. Kim Jin-woo, a researcher at Korea Investment & Securities, said, "It is remarkable that we are reviewing cooperation with a number of overseas companies for'autonomous electric vehicles', and that we have not negotiated with Apple for'autonomous driving' only." “The news related to Apple cars has been subsided for the time being, and it is unclear whether and when it will be re-implemented,” he said. I saw.