Foreigners sold in first half, but retail investors made it up
Foreign investors offloaded more Samsung Electronics shares in the first half of 2021 than any other.
In the first six months of the year, foreign investors net sold 11.3 trillion won ($10 billion) worth of Samsung Electronics common stock and another 3.7 trillion won worth of preferred stock. Combined, that amount is roughly 85 percent of the total amount of stock foreign investors net sold in the Kospi market.
But local retail investors remained heavy buyers of Samsung stock.
In the first half of the year, retail investors net bought 24 trillion won worth of Samsung Electronics common shares and 4.1 trillion won of preferred shares. They were two most popular types of stock among retail investors over the period.
In total, foreign investors offloaded 17.5 trillion won worth of Kospi stocks while retail investors net bought 55.1 trillion won worth. Institutional investors net sold 35.8 trillion won worth.
Hyundai Mobis, LG Electronics, Kia, and Samsung SDI shares were also heavily offloaded by foreign investors.
Analysts say foreign investors were particularly driven to sell semiconductor stock.
"From last November, foreign investors heavily bought semiconductor stocks, including Samsung Electronics, for about two months," said Seo Sang-young, an analyst at Mirae Asset Securities. "As [chip] shares spiked faster than expected, they stepped up to cash in their gains."
At the end of last October, Samsung Electronics common shares traded at 56,600 won. On Jan. 11, they soared to as high as 91,000 won. Over roughly two months, its share price rose by 60 percent.
There are concerns that the semiconductor industry is going to have a lackluster second half.
"The semiconductor industry tends to heat up rapidly and also cool down fast," said analyst Park Seok-hyun of KTB Securities. "Foreign investors believe the performance growth of chipmakers including Samsung Electronics has already been reflected in their share prices."
Park added that foreign investor were net sellers on the Taiwanese stock market, where chipmakers take up a large portion of the market cap.
Some analysts say foreign net selling was pushed by the strengthening of the U.S. dollar on speculation of a potential interest rate hike by the U.S. Federal Reserve.
"Strengthening of the dollar against the Korean won on concerns of Fed's tapering was one of reasons foreign investors started net selling," said analyst Lee Kyung-min of Daishin Securities.
As of Monday, the U.S. dollar was traded at 1,131.8 won per dollar, up 4.2 percent from 1,086.3 won per dollar at the end of last year.
"If [Korean] companies report earnings surprises in the second quarter as projected by brokerages, the net selling by foreign investors could subside," Park said.
On Tuesday, the Kospi closed at a record high of 3,305.21, up 0.36 percent from the previous trading day. Samsung Electronics shares rose 1 percent to close at 81,200 won and SK hynix rose 1.63 percent to 125,000 won.
BY YEOM JI-HYUN,KIM JEE-HEE [firstname.lastname@example.org]