Foreigners Holding This Stock After 20 Trillion Won in Trades Over 4 Months

Political Uncertainty Increases, Stirring Foreign Investors' Caution
Net Selling of 19.8 Trillion Won in KOSPI Market from August to November
Buying Activity in Samsung Biologics, Naver, LG Energy Solution, and Others

Due to the sudden declaration and subsequent lifting of martial law by President Yoon Suk-yeol, volatility in the domestic stock market has increased, making it inevitable for foreign investors to withdraw their funds. However, even in this situation, there are stocks that foreign investors continue to buy, attracting the attention of investors.

According to the financial investment industry on the 6th, foreign investors recorded a net sale of 727 billion KRW in the KOSPI market over two days on the 4th and 5th. On the 3rd, foreign investors showed a net purchase advantage of 566 billion KRW in one day, raising expectations that the intensity of net sales, which had continued for the past four months, might weaken. However, the declaration of martial law on the night of the 3rd caused the KRW-USD exchange rate to surge, triggering caution among foreign investors. As a result, foreign investors showed net selling dominance for two consecutive days, reducing their share of domestic stocks.

Lee Jae-man, a researcher at Hana Securities, explained, "Martial law was declared around 10:30 PM on the 3rd and lifted about six hours later," adding, "Given the high likelihood of continued domestic political turmoil, the won is expected to weaken further." He continued, "Due to the weakening attractiveness of domestic assets, foreign capital outflow is inevitable," and added, "The decline in South Korea's external credibility is also a factor discounting the won."

The 'selling' trend by foreign investors led to a sluggish domestic index. Foreign investors, who had recorded a cumulative net purchase of 31.8 trillion KRW from November last year to July this year, switched to net selling on a monthly basis starting in August. From August to November, over four months, they showed a net selling dominance of 19.8 trillion KRW in the KOSPI market. During this period, the KOSPI fell by 11.4% from August to November.

During this period, foreign investors net sold Samsung Electronics shares worth 19.1154 trillion KRW. The foreign ownership ratio of Samsung Electronics decreased by 5.1 percentage points from 56.5% to 51.4%. Kia and Samsung Electronics preferred shares also showed net selling dominance of 925 billion KRW and 598.8 billion KRW, respectively. LG Chem, SK Hynix, Hana Financial Group, and Samsung SDI also sold more than 400 billion KRW each.

While rapidly reducing their domestic stock holdings, foreign investors are buying stocks such as Samsung Biologics, Naver, LG Energy Solution, HD Hyundai Electric, Krafton, and Doosan Enerbility.

Samsung Biologics, which foreign investors have accumulated net purchases of 457 billion KRW over four months, is rapidly increasing its profits. In the third quarter of this year, on a consolidated basis, it recorded sales of 1.1871 trillion KRW and operating profit of 338.6 billion KRW, up 14.8% and 6.3%, respectively, compared to the same period last year. These figures exceeded market expectations by 9.3% in sales and 10.9% in operating profit.

Jung Yoo-kyung, a researcher at Shin Young Securities, explained, "Samsung Biologics is operating at 100% capacity from Plant 1 to Plant 3, and the sales contribution of Plant 4 is increasing," adding, "The 180,000-liter Plant 4 is lowering production costs rapidly as its operating rate increases."

Naver, which foreign investors bought shares worth 371 billion KRW, is one of the stocks with high expectations for a turnaround in performance and stock price. In the third quarter of this year, it recorded sales of 2.72 trillion KRW and operating profit of 525.3 billion KRW, up 11.1% and 38.2%, respectively, compared to the same period last year. Kim So-hye, a researcher at Hanwha Investment & Securities, analyzed, "Both performance and business conditions have bottomed out," adding, "There is significant room to raise next year's earnings estimates, which were conservatively projected."

It is also notable that foreign investors sold Samsung SDI shares while buying LG Energy Solution shares. This seems to reflect expectations for the 4680 battery technology, which can simultaneously achieve high-performance battery technology and price competitiveness. Lee Anna, a researcher at Yuanta Securities, said, "Based on the mass production know-how of the 4680 battery Ochang plant, which started in October, LG Energy Solution is expected to begin full-scale mass production at its Arizona plant in the U.S. in 2026." She added, "The 4680 battery, expected to bring a paradigm shift to existing batteries, will show the fastest mass production and customer acquisition."

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