Donghak Ants Supporting Samsung Electronics Stock Price

[Asia Economy Reporter Koh Hyung-kwang] Over the past month, foreign investors and institutional investors have sold more than 2 trillion won worth of Samsung Electronics shares. The large sell-off by major market players has been fully absorbed by individual investors, who are defending the stock price decline.

According to the Korea Exchange on the 2nd, from the 3rd of last month until the day before, foreigners and institutions net sold Samsung Electronics shares worth 878.4 billion won and 1.1572 trillion won, respectively, totaling 2.0356 trillion won.

During the same period, individual investors net bought Samsung Electronics shares worth 2.0143 trillion won. In other words, the 'Donghak Ants' fully absorbed the volume sold by foreigners and institutions. Notably, on the 31st of last month, when foreigners launched a 'selling bomb' by offloading 543.2 billion won worth of Samsung Electronics shares in a single day, individuals countered by net buying 553.6 billion won worth.

Since the 19th of last month, individuals have maintained a net buying trend in Samsung Electronics shares for 10 consecutive trading days. This is the longest streak since March, when individual investors net bought Samsung Electronics for 13 consecutive trading days (March 5?23) amid the market turmoil caused by the COVID-19 pandemic.

Recently, amid concerns over the semiconductor industry, Samsung Electronics' stock price has underperformed the market return. Based on closing prices, the KOSPI has risen 61.1% from its March low this year until the day before, while Samsung Electronics' stock price increased by only 27.53% during the same period. Lee Jae-yoon, a researcher at Yuanta Securities, diagnosed, "The DRAM market is currently in an unstable phase," adding, "There is a possibility that Samsung Electronics' memory semiconductor business performance may continue to decline until the fourth quarter of this year." However, despite the selling spree by foreigners and institutions, individual investors' active buying has kept Samsung Electronics' stock price within a box range of 54,000 won to 59,000 won over the past month.

The massive sell-off of Samsung Electronics shares by foreigners and institutions is also related to semiconductor price trends. According to market research firm DRAMeXchange, the fixed transaction price for server DRAM fell 6.8% in July and dropped another 4.4% in August. Prices for PC DRAM and 2D NAND flash also declined by 5.3% and 6.7%, respectively, over the two months.

There are also forecasts that semiconductor stocks, including Samsung Electronics, could rebound if uncertainties in the semiconductor industry subside. Kim Dong-won, a researcher at KB Securities, explained, "The spot price of DRAM, which had been declining since early April, showed a rebound starting from the 24th of last month," adding, "Looking at the price trends over the past 10 years, the DRAM spot price has acted as a leading indicator for fixed prices." He further predicted, "Considering that the full-scale stock price rebound of semiconductor companies occurred on average six months before the turning point of DRAM fixed price increases, semiconductor stocks are expected to gradually trend upward from August onward."

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