Recovery to '60,000 Electronics'... Will Foreign Buying Continue?

[Asia Economy Reporter Ji Yeon-jin] Will foreign investors buy Samsung Electronics again? Foreign investors have sold over 8 trillion won worth of Samsung Electronics shares this year due to concerns that semiconductor demand will decline amid the possibility of an economic recession caused by the sharp tightening in the U.S., but they have turned to net buying since the beginning of this month.

According to the Korea Exchange on the 19th, Samsung Electronics was trading at 60,500 won at 2:35 p.m., down 2.26% from the previous day. The stock started trading at 61,400 won that day and the decline widened as the day progressed. Just two days after recovering to the "60,000 won level" on the 15th, the stock is heading back toward the 50,000 won range.

Foreign investors have net bought Samsung Electronics worth 520.3 billion won so far this month until the previous day. It is the most purchased stock by foreigners in the domestic stock market. Next, they net bought SK Hynix worth 221.9 billion won, making it the second most purchased stock. Since the beginning of this year until the previous day, foreign investors have net sold Samsung Electronics worth 8.5026 trillion won. Although Samsung Electronics continued record-breaking earnings due to increased demand for home appliances amid reduced mobility caused by the COVID-19 pandemic, concerns about a peak in earnings starting from the second half of last year, U.S. tightening, and the Ukraine war led to a reduction in the proportion of risky assets such as stocks.

However, the mood changed with the announcement of Samsung Electronics' preliminary second-quarter earnings. Foreign investors, who had been net selling continuously throughout last month, stopped selling from the 7th, when Samsung Electronics' earnings were released. Samsung Electronics posted sales of 77 trillion won and operating profit of 14 trillion won in the second quarter, each down 1% from the previous quarter, slightly missing market expectations, but it was evaluated as earnings exceeding investors' expectations amid recent recession concerns. Taiwan's TSMC, the world's largest semiconductor foundry, also recorded a quarterly record high in second-quarter earnings, confirming solid semiconductor demand. Samsung Electronics rose 4.35% on the 15th, right after TSMC's earnings announcement, and recorded a gain of over 3% the following day. However, news that Apple has started cost-cutting measures in preparation for an economic slowdown led foreign investors to sell Samsung Electronics again on that day.

The securities industry expects Samsung Electronics' stock price to rebound. The DRAM market, which has been shaken by recent inventory adjustments, is expected to recover from the third quarter of this year. Park Yoo-ak, a researcher at Kiwoom Securities, said, "Market concerns about the recession recently have led to 'worsening customer purchase sentiment → DRAM inventory adjustment → Samsung Electronics stock price decline,' but we believe that the sharp rebound in DRAM shipments in the third quarter will improve industry investment sentiment and lead to a recovery in Samsung Electronics' stock price."

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