Foreign investors have been steadily reducing their stakes in Samsung Electronics and SK Hynix this year, while increasing their overall holdings in the KOSPI index. This trend appears to be driven by concerns over a peak in the semiconductor market, leading to a decrease in large semiconductor stocks, while lower prices have attracted bargain hunters to the KOSPI.
According to the Korea Exchange on July 17, the foreign ownership percentage of Samsung Electronics was recorded at 46.60% based on the closing price on July 16. This figure remains close to the year’s low of 46.55% recorded on July 9.
The foreign ownership in Samsung has significantly decreased. The stock price of Samsung Electronics rose 98.1% from 128,500 won on January 2 to 254,500 won on July 16. During the same period, foreign ownership dropped from 52.33% to 46.60%, a decline of 5.73 percentage points.
SK Hynix shows a similar trend. As of July 15, the foreign ownership percentage for SK Hynix was 49.88%, marking its lowest level this year after 49.87% on July 13 and 49.77% on July 14.
Despite a significant rise in stock prices, foreign investors have reduced their stakes. The stock price of SK Hynix surged 172.1% this year, climbing from 677,000 won on January 2 to 1,842,000 won on July 16. However, foreign ownership decreased from 53.83% to 49.88%.
On July 16, SK Hynix's stock fell sharply by 11.53%, prompting a rebound in foreign ownership to 52.44%, recovering to early-year levels.
In contrast, foreign investors have consistently increased their holdings in the KOSPI this year. The foreign ownership percentage relative to the KOSPI market capitalization rose from 36.65% on January 2 to 40.22% as of July 16, an increase of 3.57 percentage points. During this period, the KOSPI index climbed 72.86%, from 4,000 to 7,284.41.
Notably, during a market downturn last month, foreign ownership increased further. From July 19 to 26, the KOSPI fell by 7.20% over six trading days, with a notable drop of 9.99% in a single day on July 23. Although the index rebounded, it closed at 8,411.21 on July 26, down 5.81%, having briefly dipped below 8,100.
As the KOSPI's valuation burden decreased rapidly during this decline, foreign investors began to enter the market for bargain purchases. For six consecutive trading days, foreign ownership relative to the KOSPI market capitalization remained in the 41% range, the highest level this year.
Jun-ho Byun, a researcher at IBK Investment & Securities, noted, "Despite strong semiconductor performance, the continued selling by foreign investors reflects concerns over a peak in the industry rather than fundamentals. Given the significant rise in semiconductor stocks recently, prices may react more sensitively to negative news than to positive developments."
Analysts suggest that for a reversal in foreign investment in semiconductor stocks, there needs to be a broader recognition that the current memory cycle represents a phase of structural growth. Yoon Yeosam, a researcher at Meritz Securities, predicted, "If consensus forms that memory demand driven by increased AI investment surpasses the existing economic cycle, the trend of foreign investors reducing their semiconductor stakes may ease."
* This article has been translated by AI.
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