Changed 'Foreigners' Shopping Basket'... Loaded Semiconductors and Dropped Platforms

Samsung Electronics Tops Net Buying This Month
Followed by POSCO and SK Hynix
'Regulation Shock' Kakao Sold Off 689.5 Billion Won

[Asia Economy Reporter Park Jihwan] Foreign investors have been focusing on buying semiconductor stocks such as Samsung Electronics and SK Hynix, which are perceived to be undervalued compared to their business outlook, since the beginning of this month. On the other hand, they reduced their holdings in platform stocks like Kakao, which have been hit by regulatory issues from financial authorities.

According to the Korea Exchange on the 13th, foreign investors have net purchased Samsung Electronics worth 330.9 billion KRW in the KOSPI market as of the 10th of this month, making it the most bought stock. POSCO (269.1 billion KRW) and SK Hynix (247.8 billion KRW) also ranked high among the top purchases. This contrasts with last month, when Samsung Electronics (6.4696 trillion KRW) and SK Hynix (1.5426 trillion KRW) were the top two stocks in net sales by foreign investors.

The reversal in sentiment this month appears to be based on the judgment that semiconductor stocks are currently excessively undervalued. Considering that domestic semiconductor exports have recorded 10 billion USD (11.715 trillion KRW) for four consecutive months and the recent sustained demand, concerns about a semiconductor market peak-out (passing the high point) are somewhat easing. Agyujin, a researcher at DB Financial Investment, said, "Concerns over the recent decline in DRAM spot prices will be resolved in a short period, and DRAM prices will quickly enter an upward trend again," adding, "Currently, it is an opportunity to buy semiconductor stocks like Samsung Electronics and SK Hynix at a low price." Foreign investors also increased their holdings in POSCO by net purchasing 269.1 billion KRW, as its earnings improvement trend is clear. The securities industry estimates POSCO's standalone operating profit for the third quarter to be 2.3106 trillion KRW, a 5% increase from the previous quarter.

On the other hand, foreign investors sold stocks worth 689.5 billion KRW in Kakao, which has been affected by government regulatory issues. Given that Chinese government platform regulations caused stock price adjustments for Tencent and Alibaba, similar trends are expected domestically. In fact, Kakao's stock price fell 15.58% over three trading days following the financial authorities' indication of financial platform regulations on the 7th. While the securities industry expects the immediate impact on earnings to be limited, they anticipate that if related regulations are strengthened in the long term, it could negatively affect the stock price.

LG Chem, the second-largest net sale by foreign investors at 334 billion KRW, was affected by the recall news of Chevrolet Bolt batteries by General Motors (GM) in the U.S. For NCSoft, which saw net foreign sales of 270.1 billion KRW this month, the gloomy earnings outlook is attributed to regulatory issues in the Chinese gaming market and the poor performance of the new release ‘Blade & Soul 2,’ which led foreign investors to turn away.

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