Samsung Electronics Foreign Ownership Falls Below 55%

[Asia Economy Reporter Koh Hyung-kwang] Samsung Electronics' foreign ownership ratio has fallen below 55% for the first time in about 1 year and 3 months. This is due to foreign investors selling off 6.5 trillion won worth of Samsung Electronics shares in the past month amid the COVID-19 pandemic. On the other hand, individual investors have absorbed most of the foreign investors' Samsung Electronics sell-off, launching what is called the 'Donghak Ant Movement.'

According to the Korea Exchange on the 31st, foreigners sold 48.4 billion won worth of Samsung Electronics shares the previous day, lowering their ownership ratio to 54.90%. This is the lowest figure since December 11, 2018 (51.85%), just before Samsung Electronics canceled nearly 5 trillion won worth of treasury shares. After the treasury share cancellation, the foreign ownership ratio increased to 55.72% on December 12, 2018, when trading resumed. The treasury share cancellation effect raised the ownership ratio by 3.87 percentage points in one day.

Since then, foreigners steadily bought Samsung Electronics shares, maintaining a 57% ownership ratio from the second half of last year until early February this year. However, due to the COVID-19 pandemic, they withdrew funds, lowering the ratio to the 56% range on the 24th of last month, then to the 55% range on the 11th of this month, and further down to the 54% range (54.93%) on the 27th.

From the 24th of last month to the 30th of this month, foreigners net sold 15.9445 trillion won in the KOSPI market, of which more than 40%, or 6.5537 trillion won, was Samsung Electronics sell-off. Most of the foreign investors' Samsung Electronics shares were bought by individuals. During the same period, individuals scooped up 6.0507 trillion won worth of Samsung Electronics shares. The reason why the situation of individual and foreign investors clashing over Samsung Electronics is likened to the 1884 Donghak Peasant Movement?a social reform movement by farmers aiming to oppose feudalism and foreign invasion?is why the term 'Donghak Ant Movement' has emerged.

Kim Hyung-ryul, head of the Kyobo Securities Research Center, said, "Even in a situation where the stock market is plummeting, individual investors continue buying with the belief that the stock price of Samsung Electronics, a leading domestic company, will definitely rise, thus supporting Samsung Electronics' stock price."