As Earnings Improve, Foreign Investors Change... NH Investment, Kolmar, Bobcat Net Buying for Over 15 Days

Focused Buying on Stocks with Expected Profit Improvement... Overall Selling Pressure Also Eases

Foreign investors have been selling off for three consecutive months. This is interpreted as a response to the weak Korean won and the recent emerging risks in the Chinese real estate market. However, there are also stocks that foreign investors continue to buy amid this situation. With increased volatility in the stock market, there is advice to pay attention to stocks that foreign investors have been continuously purchasing.

According to the Korea Exchange on the 25th, foreign investors have shown a selling trend in the KOSPI market for three consecutive months since June. In June, they sold stocks worth 1.0716 trillion won, and in July, they sold 1.9745 trillion won worth. So far this month, they have net sold 335.4 billion won.

Although foreign investors have continued their selling trend, there are stocks they consistently buy. Foreign investors have been net buyers of NH Investment & Securities for 29 consecutive days. They have also shown continuous net buying for stocks such as Korea Kolmar (15 days), Doosan Bobcat (15 days), HD Hyundai Construction Equipment (15 days), Hanwha General Insurance (10 days), SoluM (9 days), HD Hyundai Heavy Industries (8 days), KT (8 days), and Cosmax (8 days).

The common characteristic of the stocks that foreign investors keep buying is that their profits are generally improving. NH Investment & Securities recorded an operating profit of 220.4 billion won in the second quarter of this year, a 43% increase compared to the same period last year, achieving an earnings surprise. Net profit also increased by 52.7%. Korea Kolmar achieved an earnings surprise as well, with a second-quarter operating profit of 55.7 billion won, up 66% year-on-year. KT's second-quarter operating profit was 576.1 billion won, a 25.5% increase from the same period last year, exceeding market expectations. Kang Min-seok, a researcher at Kyobo Securities, said, "Foreign investors tend to buy stocks with improving profits," adding, "Looking at the 12-month forward operating profit growth rate, stocks with higher profit growth rates show stronger net buying intensity."

The stock prices of these companies also show favorable trends. NH Investment & Securities' stock price rose from the 9,300 won range before the start of foreign investors' continuous buying to the 10,300 won range. Korea Kolmar's stock price, which was in the 48,000 won range before continuous foreign buying, is currently trading in the 55,000 won range.

Researcher Kang explained, "Due to foreign capital outflows, downward pressure on stock prices has intensified, causing most stocks to decline, but stocks that foreign investors are net buying show a favorable trend," adding, "It is especially important to find stocks that continue net buying rather than those that switch from net buying to net selling."

Although the selling trend has been maintained for three months, the intensity of foreign investors' selling appears to have somewhat weakened. While they sold more than 1 trillion won in June and July, the selling volume this month has shrunk to around 300 billion won. Despite foreign investors showing a selling trend due to Chinese real estate risks and the weak Korean won, it is analyzed that they are refraining from reducing their KOSPI weighting. Lee Kyung-min, a researcher at Daishin Securities, said, "Foreign investors are strongly cautious about short-term risks but are refraining from reducing their KOSPI weighting," adding, "If the visibility of the Chinese crisis were higher and the Korean won-dollar exchange rate was likely to level up, the selling volume in the spot market would not have remained at the current level."

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