Foreigners and Institutions Selling Hyundai Motor and Kia in July... Momentum in September?

Recorded an Earnings Surprise... Overseas Automakers Also Report Earnings Surprises
US Auto Demand Expected to Peak in July-August... Electric Vehicles as Momentum

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Since July, foreigners and institutions have been selling Hyundai Motor and Kia stocks. Although both companies have achieved excellent results, it is interpreted that they failed to differentiate themselves from overseas automakers.

According to the Korea Exchange on the 10th, as of the 9th, Hyundai Motor recorded 226,000 KRW, down 1.53% (3,500 KRW) from the previous trading day. Kia also closed the session at 86,000 KRW, down 1.04% (900 KRW). Even when expanded to the entire month of July, the downward trend of Hyundai Motor and Kia is clear. This month, Hyundai Motor fell 5.64%, and Kia dropped 4.02%.

It appears that the stock prices are falling as foreigners and institutions have been selling Hyundai Motor and Kia stocks since the beginning of this month. Foreigners net sold about 164.4 billion KRW worth of Hyundai Motor shares, and institutions about 229.2 billion KRW. For Kia, foreigners sold 59.2 billion KRW, and institutions sold 157.8 billion KRW.

Last month, foreigners and institutions bought Hyundai Motor and Kia shares on expectations of strong earnings. In June alone, institutions net purchased Hyundai Motor and Kia stocks worth 104.2 billion KRW and 178.2 billion KRW, respectively. Foreigners net sold about 132 billion KRW of Hyundai Motor shares but net bought 173.5 billion KRW of Kia shares.

However, since overseas automakers also posted earnings surprises, it is interpreted that the investment appeal from the foreigners' perspective has diminished. In the first half of this year, Hyundai Motor and Kia recorded a 48.1% increase in sales in the U.S. market compared to the same period last year, but BMW and Volkswagen showed growth exceeding 50%. Other automakers such as Toyota, Honda, and GM also performed well, with the average growth rate of overseas automakers in the U.S. market reaching 33.7% in the first half of this year.

Short-term supply issues are also a burdensome factor for foreigners and institutions. The third quarter of this year has more holidays than last year, and Hyundai Motor has announced a strike for the first time in three years, demanding an extension of the retirement age. Researcher Lim Eun-young of Samsung Securities explained, “Recent strikes over the past few years were partial strikes, so the impact was not significant,” adding, “If this strike coincides with the current inventory shortage, the impact on stock prices could increase.”

The securities industry expects that stock price differentiation for Hyundai Motor and Kia could be realized in September. Researcher Lim said, “Demand for automobiles in the U.S. market is expected to peak in July and August,” and added, “When demand shifts to emerging markets, the performance direction of automakers will be determined.”

Electric vehicles are expected to serve as growth momentum for the two companies. Hyundai Motor plans to introduce two Genesis electric vehicles, the G80 EV and GV60 EV, in the third quarter. Kia is scheduled to officially launch the EV6 electric vehicle at the end of this month. Researcher Lee Jae-il of Eugene Investment & Securities observed, “Recently, overseas automakers’ stock prices have been sensitive to electric vehicle market share,” and predicted, “An increase in electric vehicle sales will be a catalyst for stock price rises in the second half of the year.”

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