Foreigners Sweeping Up Samsung Group Stocks

Foreign Investors Buy Nearly Half of Samsung Group Stocks Amid Net KOSPI Purchases
Foreign Ownership Ratio Also Rises... Samsung C&T Hits All-Time High

In the domestic stock market, foreign investors have continued their buying trend, with foreign buying concentrated on Samsung Group stocks. As foreign buying inflows persist, the foreign ownership ratio of Samsung Group stocks has also expanded.

According to the Korea Exchange on the 22nd, six Samsung Group stocks?Samsung Electronics, Samsung C&T, Samsung Electronics Preferred, Samsung Biologics, Samsung Life Insurance, and Samsung SDS?were included among the top 15 stocks by net foreign buying so far this year. Foreign investors have net purchased Samsung Electronics the most, with 2.5868 trillion KRW. Alongside this, Samsung C&T saw net purchases of 706.9 billion KRW, Samsung Electronics Preferred 541.2 billion KRW, Samsung Biologics 419.2 billion KRW, Samsung Life Insurance 216.2 billion KRW, and Samsung SDS 152.2 billion KRW. Considering that foreign investors have net purchased 10.174 trillion KRW in the KOSPI market this year, nearly half of the net buying amount was poured into Samsung Group stocks.

As foreign buying inflows continued, the foreign ownership ratio of Samsung Group stocks also rose. Based on the previous day's closing price, Samsung Electronics' foreign ownership ratio stood at 54.54%. This marks an increase of 0.53 percentage points compared to the end of last year. Samsung Electronics' foreign ownership ratio had fallen below 50% in 2022 but steadily rose last year, recovering to the 54% range by year-end. This is the first time since May 2021 that the foreign ownership ratio has returned to the 54% range. The proportion has continued to expand steadily this year as well.

The foreign ownership ratio of Samsung Electronics Preferred shares has also steadily increased, recently recovering to the 74% range. Samsung Electronics Preferred's foreign ownership ratio is 74.17%, up 1.18 percentage points from the end of last year. This is the first time since March 2022 that the foreign ownership ratio of Samsung Electronics Preferred has exceeded 74%, after having fallen to the 71% range last year.

Samsung C&T's foreign ownership ratio is at an all-time high of 23.19%. It was in the 16% range a year ago but surpassed 20% for the first time this year and rose to 23%.

Samsung Biologics' foreign ownership ratio reached 11.56% in late last month, entering the 11% range. This is the first time in over two years since January 2022 that Samsung Biologics' foreign ownership ratio has recovered to the 11% range. Samsung Life Insurance's foreign ownership ratio is 18.65%, having recovered to the 18% range this year and steadily rising. This is the first time since December 2015 that Samsung Life Insurance's foreign ownership ratio has returned to the 18% range.

The foreign ownership ratio of Samsung Group stocks stands at 47.63%, up 3.24 percentage points compared to the same period last year.

The concentration of foreign buying on Samsung Group stocks this year is interpreted as being driven by the recent government corporate value-up program, which has strengthened low price-to-book ratio (PBR) stocks, and expectations of semiconductor market improvements. Park Sang-hyun, a researcher at Hi Investment & Securities, said, "Considering the improvement in the global economic environment, the continued preference for risk assets despite a strong dollar, the strong rally in the Japanese stock market and rebound in the Taiwanese stock market, additional improvements in the semiconductor market driven by the artificial intelligence (AI) cycle, and ongoing expectations for the domestic corporate value-up program, the net buying trend of foreign investors in domestic stocks is expected to continue. Above all, the key reason for the continued net buying by foreign investors is the improvement in the semiconductor market cycle. Although concerns about overheating have begun to emerge amid visible improvements in semiconductor exports and production cycles, expectations for the AI cycle are adding momentum to further improvements in the domestic semiconductor market."

In particular, expectations for strengthened shareholder returns by Samsung Group stocks are anticipated to positively influence the inflow of foreign buying. Kim Dong-yang, a researcher at NH Investment & Securities, said about Samsung C&T, "Market expectations for shareholder value enhancement are rising due to the reduction of controlling shareholder stakes through disposal trusts for inheritance tax payments, shareholder proposals from overseas activist funds, and the government's announcement of plans to operate the corporate value-up program." Im Hee-yeon, a researcher at Shinhan Investment Corp., said about Samsung Life Insurance, "In line with the government's corporate value-up program announcement, it is expected to disclose shareholder return policies, including the cancellation of treasury shares held, from the perspective of enhancing shareholder value."