Foreign Share Buying Surge Bumps Against Legal Limits

Foreign holdings of shares in key Korean corporations are at a record high level. Foreign ownership ceilings limit further purchases, and some observers expect interest in other, non-limited shares to slow down.

Overseas investors hold 49 percent of SK Telecom Co., the foreign ownership limit, the Korea Stock Exchange said Friday. Overseas holdings of Samsung Electronics Co., which does not have a foreign investment limit, reached an all-time high of 58.51 percent, the exchange said. Analysts said foreign interests own 80 percent of the memory chip and consumer electronics manufacturer's total shares offered for trading.

The 19.44-percent ceiling on foreign ownership in Korea Telecom Corp. is within a scant two shares of having been reached.

The exchange said that foreign holdings in local blue chips rose to this high level because of foreign investors' 670 billion-won ($510 million) purchasing surge Thursday, following a surprise interest-rate cut by the U.S. Federal Reserve Board.

As they cannot buy any more shares in their favorites such as SK Telecom and Korea Telecom, and not many shares in Samsung are left for them to purchase, analysts say that their shopping spree will likely slow.

"Having grabbed more than 80 percent of Samsung Electronics shares traded in the market, foreign investors may become cautious in buying more out of concern they might not be able to sell them when they want to," said Ahn Dong-won, an executive at Kiwoom.com Securities Co.

by Kim Kwang-ki