Samsung Electronics’ foreign shareholding hits 13-year low

The foreign ownership ratio of South Korean technology giant Samsung Electronics fell to its lowest level in nearly 13 years. (Illustration, AFP)

[Financial Channel/Comprehensive Report] Korean media "BusinessKorea" reported that foreign investors have continued to oversell in South Korea's KOSPI market recently, causing the foreign shareholding ratio of South Korea's technology giant Samsung Electronics to fall to the lowest level in the past 13 years.

Samsung Electronics' foreign shareholding rate was still 52.33% at the end of last year. However, with the turbulent international situation and changes in capital flows, it fell below the 50% mark in March this year, and fell to 48% in early June, and continued to decline to multi-year lows.

According to statistics from the South Korea Exchange (KRX), as of June 22, the foreign shareholding ratio of Samsung Electronics was 47.52%, a new low since August 2013.

Market analysis pointed out that large-scale profit-taking by foreign investors was the main reason for the decline in shareholdings. From the beginning of June to the 22nd, foreign investors have sold a total of 12.4 trillion Korean won (approximately NT$260 billion) of Samsung Electronics stocks; following net sales of more than 16 trillion won (approximately NT$330.2 billion) in May, they have been on the sell side for two consecutive months. In contrast, although SK Hynix, also a major memory manufacturer, has also been subject to foreign investment adjustments, its net sales exceeded its sales by about KRW 5.9 trillion (approximately NT$121.7 billion), which is only half of Samsung Electronics.

Behind the selling pressure from foreign investors, in addition to the considerable gains in South Korea's large semiconductor stocks this year, which has driven the demand for profit-taking, some market analysts believe that some funds may be prepared in advance for the potential listing of the US space company SpaceX. In addition, rising tensions between the United States and Iran and market doubts about U.S. interest rate policy have further affected capital allocation.

In stark contrast to foreign capital, South Korean retail investors continue to enter the market to take over. This month, retail investors bought more than 1.03 trillion won of Samsung Electronics (approximately NT$212.6 billion) and 1.7 trillion won of SK Hynix (approximately NT$35.1 billion), becoming important forces supporting stock prices.

The report pointed out that despite the heavy selling pressure from foreign investors, some brokerages are still optimistic about Samsung Electronics' market outlook. Ko Young-min, a researcher at Daol Investment & Securities, said that the long-term supply agreement (LTA) between Samsung Electronics and its major customers has entered the final stage of negotiation, and the price negotiation for general-purpose memory products is better than that of its peers. In addition, the sixth-generation HBM4 has begun shipping in the second quarter. It is expected that Samsung Electronics’ profit momentum will be further strengthened in the second half of the year, and it will have the opportunity to show more prominent growth momentum among the three major memory manufacturers.

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