Foreigners' 7 Trillion Won Net Selling Meaning: "Focus on the Trees, Not the Forest"

[Asia Economy Reporter Ji Yeon-jin] Last week, foreign investors led the market decline by net selling about 7 trillion won in the KOSPI market. The securities industry advises focusing on stocks that performed well in the sharp downturn, as the foreign selling was concentrated in semiconductors.

According to the Korea Exchange on the 17th, foreign investors net sold about 7.1341 trillion won in the KOSPI market from the 9th to the 13th. The net selling amount for just two stocks, Samsung Electronics and SK Hynix, reached 7.6 trillion won. This indicates that foreign investors concentrated their selling on the semiconductor sector rather than the entire domestic stock market. The semiconductor sell-off was triggered by the forecasted decline in memory semiconductor prices, and the resulting won depreciation appears to have stirred market fear.

Except for the Taiwan stock market, which has a high Information Technology (IT) weighting, other emerging markets have shown steady performance, and the V-KOSPI index, which measures KOSPI market volatility, stands at 15.4, indicating relatively stable domestic and international market volatility. The foreign investors’ net buying trend in the bond market also suggests that the semiconductor stock sell-off by foreigners is unlikely to spread to a market-wide sell-off.

Additionally, sectors centered on automobile batteries, materials, and electronic components, which have market growth and new investment momentum, continue to show solid performance. Shin Seung-jin, a researcher at Samsung Securities, explained, "Usually, when the market plunges, investors tend to approach stocks that appear relatively cheap due to price drops. However, stocks that are strong in a sharp downturn are more likely to become new market leaders. The fact that investors did not sell these stocks during the plunge proves that expectations for future earnings and growth remain solid."

Samsung Securities newly included Samsung Biologics, E-Mart, and LIG Nex1, which showed steady price performance during the adjustment period. Researcher Shin emphasized, "For the time being, it is necessary to focus on individual stocks (trees) rather than the overall market (forest) and carefully select good companies."

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