"Why Are They Selling So Much?" Has Korean Stock Lost Its Appeal?... Foreign Investors Unload 20 Trillion Won in a Month

Samsung Electronics' Foreign Ownership Drops to 46%, SK hynix to 49%
Industry Experts: "Once Earnings Visibility Improves, Investment Inflows Are Likely"

Foreign investors have unloaded over 20 trillion won worth of stocks in the KOSPI market over the past month. The stocks with the highest net sales were SK hynix and Samsung Electronics.

According to the Korea Exchange and Yonhap Infomax, from September 1 to October 2, foreign investors recorded a net sell-off of 20.305 trillion won in the KOSPI market. This amount includes transactions from the after-market that opened on September 15. Over a total of 22 trading days, foreigners posted net purchases on only seven days. Notably, on September 28 alone, the net selling exceeded 3 trillion won. Consequently, the proportion of foreign investors in the KOSPI market by market capitalization fell to 39.66%. However, there were net purchases of 243 billion won on October 1 and net sales were limited to just 190 billion won on October 2, indicating some weakening in selling pressure.

During this period, the stock with the largest net sale by foreign investors in terms of amount was SK hynix. Foreign investors recorded a net sell-off of SK hynix shares worth 12.009 trillion won. The next highest was Samsung Electronics, with net sales amounting to 5.186 trillion won.

This has resulted in a decline in the foreign ownership ratio of these stocks. As of October 2, the foreign ownership ratio for SK hynix stood at 49.76%, the lowest in approximately three years and four months since it posted 49.46% on May 15, 2023. The foreign ownership ratio of Samsung Electronics was 46.41% as of October 2, and it dropped as low as 46.40% on September 30.

The ongoing sell-off by foreign investors appears to be driven by continued profit-taking following the sharp rise in semiconductor blue-chip stocks in the first half of this year. In addition, the prolonged war between the U.S. and Iran, as well as rising interest rates in major economies such as the United States and Europe, are also cited as important factors.

However, there are forecasts within the industry that this selling trend could subside. Market analysts suggest that, as earnings season progresses, confirmation of the robust outlook for semiconductors and increased earnings visibility could lead to a new inflow of foreign capital into the Korean stock market, where these sectors have significant weight.

Micron Technology, known as a "barometer" for the semiconductor industry and the first among the global top three memory companies to announce results, reported strong earnings on September 30.

Samsung Electronics is scheduled to announce its preliminary third-quarter results around October 8.

Ji-Young Han, a researcher at Kiwoom Securities, commented, "If macroeconomic instability peaks this month and greater earnings visibility is confirmed after the third-quarter results season, it could serve as a catalyst for renewed net buying by foreigners." Jaewon Lee, a researcher at Yuanta Securities, also noted, "Even though the index rose sharply on October 1, the reduction in the scale of net selling is the first sign that supply-demand conditions may normalize once long-term rates stabilize in the future."

This content was produced with the assistance of AI translation services.