Foreign investors have net sold more than 100 million shares of Samsung Electronics on the KOSPI since the outbreak of the U.S.-Iran war, data showed.
The sell-off is interpreted as the result of foreign investors reducing their emerging market equity holdings and offloading semiconductor stocks that had surged early in the year, as risk-averse sentiment intensified following the war.
One Month After War: 100.02 Million Samsung Shares Sold
According to Korea Exchange (KRX) data compiled on the 3rd, foreign investors net sold 100.02 million shares of Samsung Electronics (005930.KS) from the 3rd of last month through the 2nd. They sold approximately 288.86 million shares during the period while purchasing only 188.83 million shares. The net selling amounted to 18.5056 trillion won ($13.6 billion).
Including net sales of 15.56 million shares on the first trading day after the war on the 3rd of last month, selling pressure dominated on all but three trading days. The "sell" parade effectively continued throughout the entire month.
The massive foreign exodus pushed Samsung Electronics' foreign ownership to its lowest level in 13 years. As of the 2nd, foreign ownership of Samsung Electronics stood at 48.40%, the lowest since September 11, 2013 (48.35%) — a span of approximately 12 years and seven months.
Semiconductor, Auto Blue Chips Line Up as Foreign Sell Targets
Following Samsung Electronics, SK hynix (000660.KS) also saw net selling of 9.538 million shares worth 8.6422 trillion won. Hyundai Motor (005380.KS) lost 5.461 million shares worth 2.8677 trillion won from foreign hands.
The sell-off was attributed to foreign investors shifting from risky emerging market equities to safe-haven assets as uncertainty surged rapidly after the war. Analysts noted that profit-taking was particularly pronounced in Samsung Electronics and SK hynix, where overvaluation concerns had built up after share prices rose sharply from the start of the year.
The fact that the Korean market is more liquid and easier to exit compared to other emerging markets was also cited as a factor accelerating the outflow.
Signs of Reversal Emerge on the 3rd
However, a shift in momentum was detected on the 3rd. The KOSPI closed at 5,377.3, up 143.25 points (2.74%) from the previous day. The index touched the 5,400 level during the session but pared gains after reports emerged that the U.S. had struck a highway bridge connecting Tehran, the Iranian capital, to a nearby city.
A change in supply-demand dynamics was also observed. Foreign investors recorded net purchases of 949 billion won on the main bourse, returning to the buy side for the first time in 12 trading days since the 18th of last month. Institutional investors also posted net purchases of 857.6 billion won. Retail investors, on the other hand, net sold 2.416 trillion won.