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| EcoPro EM's logo is seen at its factory in Pohang, North Gyeongsang Province. Yonhap |
By Lee Min-hyung
Investors are in a panic over the volatile ups and downs of Korea's secondary battery stocks after some trending companies ― such as EcoPro and POSCO Holdings ― recently suffered abrupt losses following a weeks-long super rally.
Most battery materials stocks achieved surprising gains on Friday following overnight losses, which rang alarm bells, particularly to retail investors who jumped on the frenzied buying spree of the stocks due to the high volatility.
EcoPro stood at the center of the recent battery stocks fever. EcoPro shares closed down 19.79 percent on Thursday from a day earlier, and shares of EcoPro BM also dropped by 17.25 percent during the same period. This sparked fears over their overvaluation, but the stocks surprisingly bounced back again on Friday. EcoPro closed up 12 percent, and the cathode materials-producing affiliate also made gains of around 8 percent in their stock price on the last trading day of the week.
Market analysts also issued a message of warning against the extreme fluctuation of battery stocks.
"Concerns are resurfacing that investors' sentiment is tilted too heavily toward secondary battery stocks in the local stock market," Kang Dae-seok, an analyst at Yuanta Securities, said. "The phenomenon showed signs of stabilizing back in May, but started to recur this month."
The battery stocks rollercoaster ride is affecting the overall stock market here. The benchmark KOSPI achieved gains of 2.8 percent between July 3 and July 25, but VKOPSI ― an index showing how volatile the main bourse is ― soared by 11.8 percent during the same period.
Responding to Thursday's shocking battery stocks plunge, retail investors went on a selling spree of the major battery shares both in the KOSPI and the secondary Kosdaq markets. According to data from the Korea Exchange, they sold 279.4 billion won worth of EcoPro BM shares. They also sold 128.7 billion won worth of POSCO Future M shares, driving down its stock price. But shares of the POSCO affiliate recovered almost half of its overnight losses on Friday, closing up 4.94 percent.
Securities companies are refraining from sharing battery stock outlooks over fears of losing credibility due to the wide fluctuation.
"The price volatility of such battery shares appears to have gone out of control despite a recent intervention by an exchange operator," an industry source said. "Brokerage houses will not take risks by releasing regular reports on the stocks, as it is realistically impossible for any analysts to predict the stock movement of the shares."
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