Foreign investors sold more than 20 trillion won in Korean stocks in the past month, an unprecedented scale
The sell-off was mainly concentrated in large semiconductor stocks such as SK Hynix and Samsung Electronics
Quick Look
- In the past month, foreign investors sold more than 20 trillion won of stocks on the Korea Composite Stock Price Index (KOSPI), an unprecedented scale.
- The selling was mainly concentrated in large semiconductor stocks such as SK Hynix and Samsung Electronics.
- The main reasons included profit-taking, concerns about the US-Iran conflict and pressure to raise global interest rates.
AI-generated summary
Why It Matters
Foreign capital has significantly adjusted the South Korean stock market in the past month, especially focusing on semiconductor equity stocks.
In the past month, foreign investors sold more than 20 trillion won in Korean stocks. (AP)
South Korea's "BusinessKorea" reported on the 5th that in the past month, foreign investors sold more than 20 trillion won of stocks on the Korea Composite Stock Price Index (KOSPI), indicating that foreign investors have significantly reduced their exposure to Korean stocks. Data from the Korea Exchange and Yonhap Infomax show that from September 1 to October 2, foreign investors sold more than 20.31 trillion won (NT$479.8 billion), an unprecedented scale.
The report said that this wave of selling pressure was huge. Among the 22 trading days, foreign investors were overbuying on only 7 trading days, causing foreign investors' market value share in KOSPI to drop to 39.66%.
The sell-off was focused on large-cap semiconductor stocks, which have long supported Korean stocks. During this period, foreign investors sold SK Hynix for more than 1.201 trillion won (NT$283.71 billion) and Samsung Electronics for 5.19 trillion won (NT$122.6 billion). For these two stocks alone, foreign investors withdrew more than 17 trillion won (NT$401.5 billion).
According to reports, as of October 2, SK Hynix’s foreign ownership ratio has dropped to 49.76%, the lowest level since May 15, 2023, while Samsung Electronics’ foreign ownership ratio has also dropped to 46.41%.
Market participants believe that continued profit-taking is the main reason for the selling of foreign capital. In addition, concerns about the U.S.-Iran conflict and interest rate hikes in major economies have affected investor sentiment and intensified the pressure on foreign capital to withdraw from Korean stocks.
Whether foreign capital will return to the Korean stock market will ultimately depend on the performance of the third quarter financial report. Micron Technology's better-than-expected financial report on September 30 sent a positive signal to the market, while Samsung Electronics' financial report on October 8 is expected to become a key factor in determining the flow of external funds. Han Ji-young, a researcher at Kiwoom Securities, expects that foreign investors will resume their overbuying of Korean stocks once the earnings season strengthens market confidence in corporate profits.
What to Watch
AI outlook — possibilities, not facts
Samsung Electronics’ financial report on October 8 will determine the flow of external funds
Likely · Within days
Open Questions
- How did Samsung Electronics perform in its financial report on October 8?
- When will foreign investors resume their overbuying of Korean stocks?
