Foreign investors continue to sell off their holdings in the KOSPI market, raising questions about when they might return. Despite a stable exchange rate around 1,340 won and Samsung Electronics reporting a record quarterly operating profit of 107 trillion won, the KOSPI index has struggled to gain traction, contrasting with the global trend in artificial intelligence (AI). Market experts predict that mid-October will be a turning point for foreign investment, as signs of improved fundamentals in export companies, stability in government bond yields, and performance confirmations from major global tech firms become clearer.
According to the Korea Exchange, foreign investors recorded a cumulative net sell of 20.3722 trillion won in the securities market for September, a 109.3% increase from the previous month’s 9.7943 trillion won. Since January, foreign investors have consistently sold domestic stocks, with only two months of net buying in January (3.137 trillion won) and April (23.411 trillion won). The net selling amounts surged in February to 20.4112 trillion won, March to 35.0186 trillion won, May to 44.406 trillion won, and June to 45.667 trillion won, before showing a temporary slowdown in July with 8.6221 trillion won in net selling. In the first eight days of October, foreign investors sold an additional 6.2242 trillion won worth of stocks.
Experts attribute the pressure on domestic and international markets to the depletion of semiconductor materials following Samsung Electronics' preliminary third-quarter results, concerns over U.S. Treasury yields and international oil prices, and disappointing performance from OpenAI. Notably, over 70-80% of foreign net selling has concentrated on major semiconductor stocks like Samsung Electronics and SK Hynix, contributing to a 5.4% decline in the KOSPI index, which stood at 6,625.93 as of October 8. Analysts believe that a resurgence in foreign buying could occur in the fourth quarter, coinciding with visible increases in AI-related revenues from big tech firms, a slowdown in the Federal Reserve's tightening pace, and improved export performance.
A securities firm representative noted, "The essence of the foreign selling trend is more related to skepticism about global big tech's AI capital expenditures than to exchange rates, along with concerns about the peak earnings of domestic semiconductor companies. There is a significant chance that foreign demand will improve when AI profitability is demonstrated in the earnings reports of U.S. big tech firms or when concerns about the third-quarter results of major domestic semiconductor stocks are alleviated."
* This article has been translated by AI.
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