Returning Foreigners... 1.4 Trillion KRW Net Buying on KOSPI in September

'Daechangju' Samsung Electronics Large Net Buying
SK Hynix, POSCO, Kia Also Focused Accumulation

On the morning of the 24th, the KOSPI index is displayed on the electronic board in the dealing room of Hana Bank's headquarters in Jung-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Despite growing concerns over the bankruptcy issue of real estate developer Evergrande (恒大·Hengda) and fears of interest rate hikes by the U.S. Federal Open Market Committee (FOMC), foreign investors have shown a net purchase of nearly 1.4 trillion KRW in the KOSPI market.

According to the Korea Exchange on the 26th, foreign investors net purchased 1.3772 trillion KRW in the KOSPI market from the 1st to the 24th of this month. They continued net buying for seven consecutive trading days since the 13th. This is the longest consecutive net buying streak since 14 consecutive trading days of net buying in November last month.

With only four trading days remaining this month, if foreign investors do not net sell more than 1.3772 trillion KRW during this period, it is expected to record monthly net buying for the first time in five months since April. Since the market plunged due to COVID-19 in March last year, the months in which foreign investors recorded net buying were July and November last year, and April this year.

The top stock for foreign net buying this month was Samsung Electronics. Foreign investors purchased a total of 1.3812 trillion KRW worth, exceeding the total net buying amount of foreign investors in the entire KOSPI during the same period. As the sentiment spread that the stock had entered an oversold phase, and with strong third-quarter earnings forecasts emerging, investor sentiment was stimulated again. Accordingly, Samsung Electronics’ stock price, which had fallen to 72,700 KRW at the closing price on the 20th of last month, rose to 77,300 KRW on the 24th, supported by foreign buying.

Other top stocks for foreign net buying this month included SK Hynix (417.9 billion KRW), POSCO (370.4 billion KRW), Kia (283.4 billion KRW), SK Bioscience (245.9 billion KRW), and SK Innovation (117.9 billion KRW).

Given the significant influence of foreign demand on the domestic stock market, this buying trend is evaluated as a factor that allowed the domestic stock market to perform relatively well compared to the global stock markets, which sharply declined due to Evergrande’s bankruptcy and concerns over U.S. interest rate hikes.