Closed at 74,200 won, down for seven consecutive trading days… Market capitalization ratio fell below 20%
Foreign sell-off… Main cause of ‘semiconductor industry slowdown concerns and tapering alert’
As the stock price of Samsung Electronics, the biggest stock market leader in Korea, has hit a year-round low, individual investors are becoming increasingly anxious. The share of market capitalization in the stock market also fell to less than 20% of the total.
This seems to be due to the fact that foreigners’ selling bombs continued for more than a week as the won-dollar exchange rate soared and concerns about a slowdown in the semiconductor industry grew.
On the 17th, Samsung Electronics closed at 74,200 won, down 0.27 percent from the previous trading day. It fell for seven consecutive trading days, except for the closing on the 9th.
During the eight trading days from the 5th to this day, foreigners sold 6.14 trillion won, and during the same period, individuals net bought 6.26 trillion won and received the amount sold by foreigners. From the 2nd to the 4th of this month, individual investors also net sold 1.798 trillion won, but they turned to buying again.
Shares of SK Hynix, the two-top KOSPI along with Samsung Electronics, also plummeted.
SK hynix showed a decline for seven consecutive trading days from the 4th (121,000 won), and rebounded by 1% on the 13th (10,500 won). On the day, it closed at 101,500 won.
The overall market cap of the KOSPI also decreased due to the short-term foreign selling of the two stocks, which ranked first and second in the KOSPI market cap. The KOSPI’s market capitalization reached 2262 trillion 199.6 billion won on that day, the lowest since the month.
As of today, Samsung Electronics’ market capitalization ratio in the KOSPI market cap is 19.55% (443.36 trillion won) and SK Hynix’s 3.2% (73.89 trillion won). Compared to a month ago (July 16), Samsung Electronics (476.388 trillion won) and SK Hynix (88,452.2 billion won) fell by 3.9%, down 1.5% and 0.7%, respectively.
In the securities industry, there are predictions that the stock price will rebound mainly in semiconductors, but there are also opinions that it is premature to make a hasty judgment due to variables such as the exchange rate and tapering (reduction of asset purchases).
Han Ji-young, a researcher at Kiwoom Securities, said, “The Korean stock market is expected to rebound mainly in large-cap stocks on the perception that the sharp decline of more than 1% on the 13th was excessive. It will contribute to the rebound in the share price of the domestic semiconductor industry.”
Lee Jae-yoon, a researcher at Yuanta Securities, said, “If the set production disruption in downstream industries continues due to a shortage of non-memory semiconductors, a temporary void in demand for memory semiconductors may continue. Uncertainty is growing in the forecast for semiconductor prices in the fourth quarter of this year.”
“However, memory manufacturers such as Samsung Electronics and SK Hynix have almost no inventory of less than one week and the bottleneck is getting worse, so it is unlikely that it will lead to a ‘price drop’ or a ‘prolonged down cycle (stagnation)’.” .
Ahn Young-jin, a researcher at SK Securities, said, “The consensus of market analysts is that there is room for a share price decline based on the fact that earnings adjustments in the semiconductor sector have not been performed sufficiently. It is very unusual to see a net outflow of 7 trillion won.”
“We must adapt well to the slowdown in economic indicators such as US consumption indicators and the tapering hints of the US Federal Reserve,” he predicted.
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