Foreigners Sell 'Palja' for 8 Consecutive Weeks... Continued Selling Focused on Large-Cap Stocks

[Asia Economy Reporter Song Hwajeong] Foreign investors continued their selling spree last week, maintaining an eight-week consecutive 'sell-off' trend in the domestic stock market.

According to the Korea Exchange on the 5th, foreign investors net sold approximately KRW 2.2703 trillion in the domestic stock market during the week from the 30th of last month to the 3rd of this month. They sold KRW 1.9911 trillion in the KOSPI market and KRW 278.9 billion in the KOSDAQ market.

The stock most purchased by foreign investors last week was HL Biopharma. Foreign investors net bought HL Biopharma by KRW 27.6 billion last week. Following that, they purchased Pearl Abyss for KRW 27 billion. Other stocks net bought included Hanjin KAL (KRW 17.4 billion), KMH (KRW 14.4 billion), Komipharm (KRW 11.5 billion), Miko (KRW 11 billion), RFHIC (KRW 8.4 billion), Macquarie Infrastructure (KRW 7 billion), Nature Cell (KRW 6.9 billion), and NHN Korea Cyber Payment (KRW 6.3 billion).

The stock most sold by foreign investors last week was Samsung Electronics. Foreign investors net sold Samsung Electronics by KRW 239.4 billion last week. Next, they sold Celltrion for KRW 170.2 billion. Other top net sold stocks included Celltrion Healthcare (KRW 129.8 billion), Samsung SDI (KRW 97.3 billion), LG Chem (KRW 89.5 billion), Samsung Electronics Preferred Shares (KRW 82.1 billion), SK Innovation (KRW 58.3 billion), KB Financial Group (KRW 58.1 billion), Seegene (KRW 49 billion), and S-Oil (KRW 46.8 billion).

There is an analysis that foreign selling may continue mainly in large-cap stocks. Yeom Dongchan, a researcher at Ebest Investment & Securities, said, "Despite recent financial market stabilization trends, the reasons foreign investors continue selling include the possibility of sovereign wealth funds in the Middle East and Norway liquidating assets due to falling oil prices, and arbitrage trading from spot and futures backwardation." He added, "Therefore, foreign selling focused on large-cap and representative stocks may continue until oil prices stabilize or backwardation shifts to contango."

Despite this situation, there is an opinion that stocks purchased by foreign investors can expect a positive trend in the future. Researcher Yeom said, "For stocks bought by foreign investors, a favorable approach is necessary as positive trends can be expected even after foreign selling stabilizes." He explained, "Among these companies, mid-cap stocks tend to have a higher proportion than large caps. Attention should be focused on sectors where foreign investors purchased more than 10% of the market capitalization during March among companies with a market cap exceeding KRW 1 trillion."