[Beginner's Guide to Stock Market] Now '90,000 Electronics?'... Will Foreigners Continue to Buy in a Storm?

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Last week, we cannot talk about our stock market without mentioning ‘semiconductors’.

Finally, Samsung Electronics broke through the psychological barrier of ‘70,000 won’.

The US semiconductor company Nvidia’s ‘earnings surprise’ had an impact on semiconductor stocks in our market as well.

Interestingly, it was foreign investors who cheered the news of the nation’s stock, Samsung Electronics, reaching ‘70,000 won’.

Let’s take a look at the background behind this.

Samsung Electronics’ unstoppable momentum... New yearly high

On the 25th, Samsung Electronics recorded 70,000 won during trading hours, marking a 52-week high.

Samsung Electronics surpassing the 70,000 won mark is the first time in about 1 year and 2 months since March 31 last year (70,200 won).

This was positively influenced by Nvidia’s announcement that its fiscal second quarter (May to July) revenue is expected to reach around $11 billion (approximately 14.531 trillion won), exceeding market expectations by 50%, which also affected our stock market.

Nvidia’s fiscal first quarter (February to April) revenue was also $7.19 billion (approximately 9.4979 trillion won), about 10% higher than market expectations.

If it had been just that day, it would have ended as the ‘Nvidia effect’.

However, on the following day, the 26th, Samsung Electronics continued its rally, settling above 70,000 won with a closing price of 70,300 won.

It seems that the market sentiment improved as the semiconductor industry’s downcycle finally ended and signals of a full-fledged improvement in the second half of the year emerged.

Who is the winner of breaking through ‘70,000 won Samsung Electronics’? Foreigners?

Foreign investors are said to be beaming with smiles over Samsung Electronics breaking through ‘70,000 won’.

That’s because foreigners have net bought a total of 12.4986 trillion won in the KOSPI market alone from January 2 to May 26 this year.

Among this, about 75%, or 9.2754 trillion won, was ‘all-in’ on Samsung Electronics.

On the other hand, institutional investors net sold Samsung Electronics stocks worth 1.4516 trillion won during the same period, and individual investors also net sold 7.5839 trillion won worth.

Foreigners had net sold Samsung Electronics stocks for three consecutive years during the COVID-19 pandemic from 2020 to 2022.

As a result, the foreign ownership ratio of Samsung Electronics dropped to 49.24% on September 29 last year.

This year, foreigners’ love call for Samsung Electronics is completely different from the past three years.

Currently, the foreign ownership ratio of Samsung Electronics has surpassed 52%.

This is the first time since March last year that the foreign ownership ratio of Samsung Electronics has exceeded 52%.

Researcher Lee Seung-woo of Eugene Investment & Securities explained, “Foreigners’ net buying trend of Samsung Electronics has been clear this year. On an annual basis, foreign investors net sold Samsung Electronics stocks worth 30.8 trillion won during the COVID-19 pandemic from 2020 to 2022, but this year, they have net bought over 9 trillion won in five months.”

Researcher Lee Woong-chan of Hi Investment & Securities said, “Although foreign capital outflow was detected in the KOSPI from February to early April, foreigners did not sell Samsung Electronics even while reducing their KOSPI weighting. Foreigners started buying at the end of March and concentrated on buying Samsung Electronics stocks in the KOSPI after April. A market supporting large-cap stocks like Samsung Electronics is expected to continue.”

Semiconductor outlook for the second half of the year: ‘Clear skies’

[Image source=Yonhap News]

Following Samsung Electronics breaking through 70,000 won, securities firms are raising their target prices for Samsung Electronics one after another.

Some securities firms even forecast a ‘90,000 won Samsung Electronics’.

Eugene Investment & Securities raised Samsung Electronics’ target price from 82,000 won to 90,000 won.

Yuanta Securities and IBK Investment & Securities also set Samsung Electronics’ target price at 90,000 won.

It is expected that money moves toward Samsung Electronics will continue for some time due to the semiconductor industry improvement.

Samsung Electronics, which has secured semiconductor production capacity and cash, is highly likely to be the winner after this semiconductor downcycle,

and the semiconductor supply-demand improvement in the second half of the year is expected to accelerate, leading to an entry into the semiconductor industry’s upward cycle next year.

Also, Samsung Electronics’ operating profit forecast for this year is 10.5 trillion won, with 12% in the first half and 88% in the second half, so the expected expansion of performance improvement in the second half will also drive investor sentiment.

Researcher Kim Dong-won of KB Securities said, “Foreigners’ net buying in the KOSPI this year is over 11 trillion won, and their net buying of Samsung Electronics is over 9 trillion won, the largest since the Korea Exchange started compiling statistics in 1998,” adding, “Money moves toward Samsung Electronics are expected to continue for the time being.”

Dear Joorini investors,

Predicting stock prices is beyond our ability,

but I believe that always keeping an antenna up and studying industry trends and outlooks is something investors can definitely do.

Some investors may cheer for Samsung Electronics breaking through 70,000 won, while others may feel regret.

I hope this serves as an opportunity for Joorini investors to take more interest and study the industry outlook of the stocks they have invested in.

That concludes my writing.

If this article was helpful, I would appreciate it if you could click ‘Like’ and ‘Subscribe’ once each.

This article is from [Joorini Guide], published weekly by Asia Economy. We explain stock-related financial news and difficult economic stories in an easy and friendly way so that stock beginners can understand. By clicking subscribe, you can receive articles for free.

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