Shares in DI Dongil, a company listed on the Korea Exchange's main board, have plunged for two straight days on allegations it was involved in a stock-rigging case worth 100 billion won, while only foreign investors are actively buying. This contrasts with pension funds and other institutions and individual investors, who are selling in unison.
According to the Korea Exchange on the 24th, foreign investors recorded a net purchase of DI Dongil shares worth about 1.2 billion won the day before. On the same day, institutions posted a net sale of about 1.3 billion won, and individuals sold a net 40 million won. In particular, pension funds dumped shares worth 1 billion won.
As of 10 a.m. that day, foreigners were additionally net buying DI Dongil shares worth 150 million won. At the same time, DI Dongil's share price was down 12% from the previous trading day. Early in the session, it fell to 21,500 won, setting a 1-year low.
Foreign investors are seen as viewing DI Dongil's short-term drop as a chance for a rebound and moving to buy on the dip.
DI Dongil finished the session at the lower limit (the bottom of the daily price band) the previous day after it became known as a stock in which wealthy figures such as school principals and cram school heads and employees of financial firms colluded to rig prices worth 100 billion won. (☞ [Exclusive] The stock where a 100 billion-won wealthy investor stock-rigging scheme took place is DI Dongil... shares tumble) Some margin-financed positions held by individual investors also appear to have been liquidated via forced selling that day.
DI Dongil traded around 25,000 won early last year, rose to 50,000 won by the end of last year, and continued to trade around 40,000 won this year. Based on price movements alone, it was hard to suspect stock manipulation, but authorities said they detected abnormal transactions in the stock. That is because trades repeatedly moved shares from this account to that account, incurring transaction expenses with no economic benefit.
Authorities judged the trades as attempts to boost trading volume and investigated whether prices were being manipulated. The Securities and Futures Commission froze the accounts of suspects involved in manipulating the stock. Authorities said the valuation gains on shares held in the related accounts reached 100 billion won.
Regarding this, DI Dongil said, "The company is a victim of illegal forces' stock manipulation," and "We hope the authorities' stern investigation will clearly reveal the truth of the case."