Foreign investors bought a net 919.8 billion from Samsung Electronics and earned 829.6 billion from SK Hynix from the 29th of last month to the 21st of this month. The photo shows the Seocho Samsung Electronics office building in Seocho-gu, Seoul. [사진 출처 = 연합뉴스]Amid growing forecasts that the semiconductor industry will continue to suffer until the first half of next year, foreign investors have scooped Samsung Electronics and SK Hynix about 1.7 trillion won in the past four weeks. There are also different interpretations of the sudden purchase of major semiconductor stocks by foreigners. There are explanations that buying at a low price flows in because the price of the stock has fallen suddenly, and there are interpretations that it is only a temporary short cover, where stocks are bought to repay borrowed stocks.
According to stock market on the 21st, Samsung Electronics, the leader of the KOSPI, rose 5.27% from 53,100 won to 55,900 won from the beginning of this month to the 21st of last month.
SK hynix rose 8.90% during the same period. This number is much higher than the KOSPI yield of 2.67%.
Samsung Electronics and SK Hynix, the major semiconductor stocks that represent the domestic stock market, have been slow relative to the market. From the beginning of the year to the end of September, the KOSPI fell 27.6% from 2900 to 2150, while Samsung Electronics fell 32.2% and SK Hynix fell 36.6%. Contrary to the general expectation of a relatively stable trend in a bear market, it has fallen more than the market average and has recently been showing a steeper upward trend.
The recent strength of Samsung Electronics and SK Hynix shares is led by foreign investors. Foreign investors showed a net buying trend in the KOSPI market for 13 consecutive trading days from the 29th to the 19th of last month. After showing a net sale of 3.7 billion won a day on the 20th, it again net bought 19.1 billion won on the 21st. From the 29th of last month to the 21st of this month, foreign investors’ accumulated net purchases amounted to 2.438 trillion won. Most of them were used to include Samsung Electronics and SK Hynix. During this period, net foreigners bought Samsung Electronics for 919.8 billion won and SK Hynix won for 829.6 billion. 71.7% of the total net purchase was used to buy just two stocks, Samsung Electronics and SK Hynix.
Foreigners sold 17.97 trillion of Samsung Electronics in the last year. Also this year, it sold 10.21 trillion won in net sales until the end of September.
Various interpretations are emerging as foreign investors, who have been steadily selling Samsung Electronics, have recently turned to buying. Some in the market see it as a simple short cover. As discussions regarding the investment of the stock market stabilization fund and the ban on short selling were ongoing, an optimistic view of the domestic stock market came in at the bottom. The recent rebound in Samsung Electronics stocks and foreign buying is just a temporary trend that has nothing to do with fundamentals or valuations.
In fact, looking at the numbers, short selling for Samsung Electronics is on the rise. The short selling balance, which was 577.2 billion won at the end of last month, increased by 51.8 billion won to 629 billion won on the 18th. The balance sheet, a leading indicator of short selling, also increased from 11.22 million shares during the same period to 130.46 million shares on the 20th.
Some say the increased attractiveness of Samsung Electronics at low prices is a factor in converting foreign investors to buy. The market capitalization of Samsung Electronics is currently 33.37 trillion won, which is almost similar to the total capital of 327.906.6 billion won at the end of June. SK Hynix has a total capital of 66.76 trillion won and a market cap of 65,884.2 billion won. Samsung Electronics has a PBR of about 1x, and SK Hynix is less than 1x. This means that even if the company is dissolved immediately, the main battle is still possible. In particular, as the won/dollar exchange rate has risen by more than 20% since the beginning of the year, the valuations of Samsung Electronics and SK Hynix in dollar terms have fallen further.
On the other hand, domestic stock markets still show a negative reaction to major semiconductor stocks. The share price of semiconductor stocks has no choice but to keep pace with industry and market trends, as both variables make it difficult to make an optimistic short-term forecast.
Kim Jang-yeol, a researcher at Sangsang-In Securities, said, “It is difficult to say that macroeconomic risks have been fully reflected. It will be realistic,” he said.
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