Both the U.S. and Korean stock markets are showing a pronounced ‘crowding’ phenomenon ahead of year-end. While transactions in the U.S. market are concentrated in corporations related to new technologies, political and policy theme stocks dominate trading in the Korean market.
According to the financial investment industry on the 17th, D-Wave Quantum topped the transaction volume in the New York Stock Exchange overnight. D-Wave Quantum is a corporation that develops quantum computing systems. The stock price, which had been below $1 in October, surged to $7.23 at the close of that day.
Quantum computing corporations IonQ and Rigetti Computing also made it into the list of top trading stocks on the New York Stock Exchange and Nasdaq. Following the announcement that a quantum computer equipped with Google's self-developed quantum chip “Willow” solved a problem that would take 10 septillion years on traditional supercomputers in just 5 minutes, investors flocked to quantum computing-related stocks.
Drone-related stocks like Archer Aviation also experienced a surge in transaction activity. The sighting of numerous drones across New Jersey, New York, Connecticut, Pennsylvania, Massachusetts, and Virginia for nearly a month has sparked optimism that the Donald Trump administration will expand investments in drone technology.
Not only Nvidia but also artificial intelligence (AI) related stocks like BigBear.ai Holdings continue to remain among the top transaction volumes steadily.
Forecasts suggest that the concentration phenomenon in the U.S. market will continue for a while. Seo Sang-young, a researcher at Mirae Asset Securities, noted, “While the U.S. stock market has been on a bullish trend for nearly two years, with an increasing number of rising stocks, this month has seen a focus on certain stocks, leading to a compression in the number of trading stocks,” and added, “This compression of stocks is expected to persist until the year-end.”
In the Korean stock market, the crowding phenomenon for political and policy theme stocks has become pronounced since the Dec. 3 martial law incident. As of 1 p.m. that day, Daewon Electric and Orient Precision were the top traded stocks in the KOSPI and KOSDAQ markets. Each is linked to themes involving National Assembly Speaker Woo Won-sik and Democratic Party Leader Lee Jae-myung, attracting investors. SG Global, themed around Gyeonggi Province Governor Kim Dong-yeon, and Nexteye, associated with Reform Party lawmaker Lee Jun-seok, also ranked high in transaction volumes.
Even when extending the timeline from the 4th, the last day before the declaration and lifting of the state of emergency, to the present, eight out of the top ten stocks in the domestic stock market transaction volume, excluding Samsung Electronics and Polaris AI, were political theme stocks. It seems that investors are flocking to politically themed stocks amid a contracting domestic stock market.
Considering the situation during former President Park Geun-hye's impeachment phase, the crowding phenomenon for political theme stocks is expected to continue. At that time, political theme stocks like KD Construction (now KD), Iteron, Genko, and Mirae Industry reached the top transaction volumes during the periods following the impeachment motion and the impeachment trial leading up to the presidential election. However, currently, all of these stocks are considered 'penny stocks', with prices below 1,000 won.