Samsung Electronics, Returning Foreign Investors... Net Buying Resumes After 9 Trading Days

Net Buying Turnaround After 9 Trading Days
Previous Day's Closing Price Recovers to Around 67,000 Won
Watchful for Signs of Stock Price Rebound

Foreigners Buy 12 Billion Won, Institutions 220 Billion Won
Perception of Samsung Electronics' Undervalued Corporate Value
"This Year's Performance Expected to Surpass 2018 Record"

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Samsung Electronics, the KOSPI leader experiencing continued foreign selling known as 'Sell Korea,' has returned to net buying by foreigners after 9 trading days. Along with institutions joining the buying spree, Samsung Electronics closed about 2% higher the previous day. Attention is focused on whether the inflow of foreigners amid perceptions of excessive undervaluation relative to corporate value signals a rebound.

According to the Korea Exchange as of 9:01 AM on the 18th, Samsung Electronics was trading at 68,500 KRW, up 1.33% from the previous trading day. The previous day, Samsung Electronics closed at 67,600 KRW, up 1.96%. The closing price recovering above 67,000 KRW was the first time in 8 trading days since May 4.

It has been revealed that foreigners have sold more than 5 trillion KRW worth of Samsung Electronics shares just this year. Since the first trading day of the year on January 3, foreigners have been net sellers for 65 trading days. Among these, foreigners consecutively net sold for 25 trading days from March 25, marking the longest consecutive net selling period this year. In the past month (April 18 to May 17), foreigners sold 2.1241 trillion KRW worth of Samsung Electronics shares. During the same period, institutions were net buyers of 185.4 billion KRW.

Samsung Electronics' upward trend is analyzed to have been driven by the combined net buying by foreigners and institutions. The previous day, foreigners net bought 12 billion KRW, and institutions net bought 220 billion KRW.

The return of foreigners to net buying is interpreted as a shared perception that Samsung Electronics' corporate value is excessively undervalued relative to its performance, along with confirmation of downside rigidity in the Korean stock market.

According to financial information provider FnGuide, Samsung Electronics' consolidated operating profit forecast for Q2 this year is 15.2774 trillion KRW, which is about 22% higher compared to the same period last year. Sales are projected to rise about 24% to 78.6432 trillion KRW.

Lee Seung-woo, a researcher at Eugene Investment & Securities, said, "Although there are some concerns, the stock price has fallen harshly," and added, "Samsung Electronics' performance this year is expected to set a new record, surpassing the 2018 second memory supercycle."

Meanwhile, Samsung Electronics' foreign ownership ratio has steadily declined, reaching a historic low of 50.74% as of the 17th. One year ago, on May 17, 2021, the foreign ownership ratio was 53.84%.