Foreigners Who Sold 10 Trillion Won This Month, Are They Coming Back?

Foreigners Net Buy 1 Trillion KRW in KOSPI This Month
Focus on Large-Cap Stocks with Strong Earnings Like Samsung

[Asia Economy Reporter Song Hwajeong] Foreign investors have been net buyers of 1 trillion won in the KOSPI market since the beginning of this month, raising expectations for the return of foreign investors.

According to the Korea Exchange on the 12th, foreign investors purchased 1.0079 trillion won in the KOSPI from the beginning of this month until the 8th. This is the first time in two months that foreign investors have shown net buying in the KOSPI. Last month, foreign investors sold 877.8 billion won, and in August, they sold 2.8469 trillion won. In July, they purchased 1.079 trillion won.

Foreign investors expanded net buying mainly in large-cap stocks, focusing particularly on companies with strong earnings. First, foreign investors net bought Samsung Electronics worth 337.8 billion won this month, making it the most purchased stock. Samsung Electronics announced its preliminary Q3 earnings on the 8th. Samsung Electronics recorded sales of 66 trillion won and operating profit of 12.3 trillion won in Q3. These figures represent increases of 6.5% and 58.1%, respectively, compared to the same period last year. This is the first time in seven quarters since Q4 2018 that quarterly operating profit exceeded 10 trillion won. Foreign investors also ranked LG Electronics, which announced strong earnings on the same day as Samsung Electronics, among their top net purchases. Foreign investors bought 72.1 billion won worth of LG Electronics this month. LG Electronics achieved its highest-ever Q3 performance with sales of 16.9 trillion won, up 7.8% year-on-year, and operating profit of 959 billion won, up 22.7%.

Foreign investors also purchased BBIG (Bio, Battery, Internet, Game) stocks, which led the market this year, but showed differentiation by sector. This month, foreign investors net bought LG Chem worth 290 billion won, the second largest after Samsung Electronics, followed by Kakao (161.5 billion won) and Naver (118.9 billion won). Foreign investors also focused on battery and internet sectors within BBIG, net buying Samsung SDI by 58.2 billion won. On the other hand, NCSoft was sold off by 92.7 billion won this month, ranking first in net selling, and Celltrion was also net sold by 70.7 billion won.

Lee Yesin, a researcher at Shinhan Financial Investment, analyzed, "The seasonality of supply and demand supports the possibility of a shift from individual investors, who have driven this year's stock market rise, to foreign investors. Since 2010, individuals tend to switch to net selling in the second half of the year, especially in the fourth quarter." The researcher added, "Also, the proportion of individual trading in the KOSPI exceeded 70%, the highest level since 2005, last month before falling again, while the proportion of foreign trading rebounded from the lowest 12% during the same period to recently exceed 15%."

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