Foreigners Dump Samsung, SK Hynix; Retail Investors Score Record KOSPI Buys

In the Korean stock market (KOSPI) this month, foreign investors recorded their largest-ever net stock sales, while individual investors achieved their largest-ever net purchases, leading to starkly divergent market movements.

Through November 29, foreign investors net sold 44.715 trillion won in the KOSPI market, marking a monthly record. During the same period, individual investors net purchased 35.094 trillion won in the KOSPI market, setting a new record for individual net purchases.

Meanwhile, foreign investors net purchased 2.837 trillion won in the KOSDAQ market through November 29, also a record high. The selling pressure from foreign investors shifted to the KOSDAQ market, where their net purchases reached an all-time high of 2.837 trillion won.

The top two stocks sold off by foreign investors in the KOSPI this month were SK Hynix (20.716 trillion won) and Samsung Electronics (16.027 trillion won). The combined net selling of these two stocks accounted for 82% of the total KOSPI net sales. In the KOSDAQ market, the most net purchased stock by foreign investors was Fadu (437 billion won), followed by Ecopro BM (155 billion won).

Recent foreign capital flows have been analyzed as a temporary rebalancing process. An analyst at Hyundai Motor Securities stated that it is necessary to reduce semiconductor holdings in the market before the profit cycle's peak in the second or third quarter. It is anticipated that operating profit and profit margins, based on the current consensus of 12-month forward earnings, will peak out next year. Consequently, a potential peak in semiconductor stock prices is projected for late this year to early next year. This suggests a need for cautious market response, coinciding with strong retail investor buying in semiconductor stocks.