Which Stocks Did Foreigners Shop for in the Bear Market?

[Asia Economy Reporter Minji Lee] As the KOSPI shows weakness below the 3000 level, foreign investors appear to be accumulating stocks mainly in sectors with low volatility, such as energy and financial stocks.

According to the Korea Exchange on the 18th, the stocks most purchased by foreign investors from the beginning of this month until the 15th were LG Chem (KRW 367.4 billion) and SK Innovation (KRW 116.7 billion), both leading companies in the secondary battery sector.

Although these are leading secondary battery stocks, the buying interest is interpreted as highlighting the investment appeal of business divisions other than secondary batteries.

LG Chem is expected to report an operating profit of KRW 1.1079 trillion in the third quarter, a 22% increase compared to the same period last year, with the chemical division playing a key role. Kang Dong-jin, a researcher at Hyundai Motor Securities, explained, "Due to power regulation issues in China, the favorable market conditions for chemical products in the ABS and PVC sectors are being prolonged." The recent core investment in the eco-friendly plastics industry (LA-PLA) is also a factor that could improve investor sentiment in the long term.

SK Innovation is predicted to achieve a turnaround with a profit of KRW 450.4 billion in the third quarter, supported by improved refining margins (profits excluding crude oil prices from chemical product prices) due to rising oil prices. The lubricants division is expected to continue its strong performance following the first half of the year.

Foreign investors also increased their investments in bank stocks. They added leading banks KB Financial Group (KRW 71 billion) and Woori Financial Group (KRW 31.1 billion) to their portfolios. These stocks are expected to deliver stable earnings due to improvements in NIM (net interest margin) from base rate hikes and reduced provisions. The recent increase in dividend payment frequency by bank stocks also enhances their investment appeal.

Hanwha Investment & Securities recommended Woori Financial Group, stating that the increase in fee income from capital incorporation and improvement in the selling and administrative expense ratio have not been fully reflected in market expectations. Kim Do-ha, a researcher at Hanwha Investment & Securities, said, "Due to the significantly higher dividend yield compared to competing groups, there is strong short-term stock attractiveness," adding, "The sale of shares by the Korea Deposit Insurance Corporation partially removes uncertainties that had been suppressing valuation."

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