Foreigners Sell Samsung Group Shares Worth 2.5 Trillion Won... Holding Secondary Battery and Energy Stocks in Both Hands

Samsung Electronics Alone Net Sold Over 2 Trillion This Month
LG Chem and SK Innovation Lead Net Buying
Stocks Related to Economic Reopening Also See Shopping Spree

On the morning of the 18th, when the KOSPI started with an early decline, dealers were working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul.
[Photo by Yonhap News]

[Asia Economy Reporter Minwoo Lee] Foreign investors, who had recently returned to net buying, have massively net sold Samsung Group-related stocks this month. On the other hand, they purchased secondary battery and energy-related stocks. There is also growing interest in reopening-related sectors.

According to the Korea Exchange on the 18th, foreign investors net sold Samsung Electronics worth 2.0037 trillion KRW from the beginning of this month until the 15th. This is the largest scale of net selling by foreigners during the period. Including preferred shares, foreigners sold Samsung Electronics stocks worth 2.2739 trillion KRW. Additionally, Samsung Group stocks such as Samsung SDI (184.2 billion KRW, 3rd place) and Samsung Electro-Mechanics (106.2 billion KRW, 5th place) dominated the top ranks of foreign net selling. Among the top five net sold stocks by foreigners during this period, the only non-Samsung Group stock was KakaoBank (112.1 billion KRW, 4th place).

Conversely, secondary battery and energy-related stocks were intensively net bought. LG Chem ranked first with net purchases worth 367.5 billion KRW. SK Innovation also bought stocks worth 116.8 billion KRW. The secondary battery-related exchange-traded fund (ETF) ‘TIGER China Electric Vehicle SOLACTIVE’ ranked 7th with net purchases of 40.4 billion KRW. Not only secondary batteries but also energy-related stocks occupied top positions. Hanwha Solutions (81.6 billion KRW, 3rd place) and Korea Gas Corporation (61.0 billion KRW, 5th place) are representative examples.

There is an analysis that a shift in holdings is occurring ahead of the ‘with COVID-19’ phase. In particular, foreigners have started net buying reopening-related stocks such as clothing, hotels, and duty-free shops. Foreign investors have net bought clothing company F&F for eight consecutive trading days since the 5th. This is due to continued high growth in the Chinese market and expectations that the solid domestic market will receive another boost in the with-COVID-19 atmosphere. From the beginning of this month until the 15th, F&F’s stock price rose about 25.1%. Securities firms have even predicted it will become a ‘royal stock’ (a stock priced over 1 million KRW per share) by setting target prices above 1 million KRW. Additionally, stocks like Hotel Shilla and Hyundai Department Store have also started to be purchased.

Daejun Kim, a researcher at Korea Investment & Securities, said, "If economic reopening fully begins next month, earnings estimates for related companies are likely to increase further," adding, "Now is the time to refocus on the imminent reopening, and we can expect a positive atmosphere to spread from representative sectors such as clothing, hotels, and duty-free shops to other sectors like airlines and entertainment."