[MarketING] The Rebound Led by Foreigners and Samsung Electronics

KOSPI Recovers to 2380 Level on Foreign Buying
Samsung Electronics Rises 1.82%, Rebounds After 3 Days of Decline

[Asia Economy Reporter Song Hwajeong] The KOSPI rebounded after three days. Although it started the day weak due to concerns about a U.S.-originated economic recession, it turned to an upward trend as foreign investors actively bought shares. The foreign buying was concentrated on Samsung Electronics, leading the KOSPI's rebound. The expectation of production cuts and the resulting improvement in the semiconductor market conditions are interpreted as factors that led to foreign investors buying Samsung Electronics and the KOSPI's rebound.

KOSPI Rebounds After Three Days... Recovers to 2380 Level

On the 19th, the KOSPI closed at 2380.34, up 12.02 points (0.51%) from the previous day. The KOSDAQ ended the session at 712.89, up 1.14 points (0.16%).

Due to concerns about an economic recession and the significant drop in the New York stock market the previous day, the KOSPI started weak but succeeded in rebounding as foreign buying actively flowed in, escaping the downtrend after three days. Foreign investors purchased 572.1 billion KRW in the stock market, continuing their buying trend for the seventh consecutive day. Since the beginning of this month, foreign investors have net bought over 4 trillion KRW.

Foreign buying was concentrated on Samsung Electronics. On this day, foreign investors net bought 290 billion KRW worth of Samsung Electronics shares. This accounted for more than half of the total net buying volume. Thanks to this foreign buying, Samsung Electronics closed at 61,500 KRW, up 1.82%. Samsung Electronics also succeeded in rebounding after three days. Samsung Electronics has risen 11.21% since the beginning of this year. During the same period, foreign investors bought the most Samsung Electronics shares, totaling 1.3629 trillion KRW.

Lee Kyung-min, a researcher at Daishin Securities, analyzed, "With the support of foreign investors' net buying, the KOSPI successfully turned to an upward trend," adding, "It was not due to any special event or fundamental change, but Samsung Electronics essentially led the rise alone."

Semiconductors: Expectations for Supply and Demand Improvement from Q2

Foreign investors' concentrated buying of Samsung Electronics is interpreted as driven by expectations of production cuts and the resulting improvement in semiconductor supply and demand.

According to KB Securities, Samsung Electronics is expected to implement indirect production cuts from Q1 through production line rearrangements, delays in new expansions, and expansion of fine process transitions. Dongwon Kim, a researcher at KB Securities, explained, "The effects of these production cuts are expected to appear from Q2 to Q3," adding, "The indirect production cut effect of Samsung Electronics is estimated to reduce global DRAM and NAND supply by 7% in the second half of the year." Kim further noted, "Especially at a time when semiconductor inventories of customers are expected to decrease for the first time in a year in Q1, Samsung Electronics' indirect production cuts are highly likely to stimulate inventory accumulation demand from customers anticipating inventory normalization." Memory semiconductor inventories held by North American server and Chinese smartphone companies are expected to decrease by 25% in Q1 compared to the previous quarter, marking the first decline in a year. Accordingly, inventories are expected to approach normal levels in Q2 and normalize from Q3.

Kim predicted, "The direct production cut efforts implemented by global semiconductor companies since Q4 last year and the indirect production cut effects from this year's quarterly line rearrangements and delays in new expansions will affect memory semiconductor supply and demand improvements from Q2."

There are also opinions that Samsung Electronics' current stock price is at a low level, warranting phased buying. Myungseop Song, a researcher at Hi Investment & Securities, said, "Customer inventory rebuilding is expected to start after Q3 this year, and demand is expected to recover in Q4, leading to a recovery in the semiconductor market," adding, "Samsung Electronics' current stock price is still at a low level, and the year-end stock price is likely to be significantly higher than the current price, so we continue to recommend phased buying at the low point."

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