Foreign investors are increasingly concentrating money in stocks that are already rising, rather than in undervalued names, reinforcing a trend-following approach. Despite the run-up, they have continued buying on expectations of improving earnings and relatively low valuations. Brokerages said foreign flows could be key to whether the Kospi breaks above 7,000.
According to the Korea Exchange on May 5, the 10 most heavily net-bought stocks by foreign investors on the main Kospi market at the end of last month all posted gains compared with the end of March.
Samsung Electronics was the top foreign buy on the Kospi, with net purchases of 1.3231 trillion won. Over the same period, its shares jumped 32% to 220,500 won from 167,200 won. SK hynix, the No. 2 net buy, rose 59%. The gains followed record first-quarter results from Samsung Electronics and SK hynix, fueling expectations that a semiconductor earnings recovery will continue. Other strong performers backed by foreign buying included Samsung SDI (up 70%), Doosan Enerbility (39%), Samsung Electro-Mechanics (104%) and Daehan Electric Wire (111%), with some stocks more than doubling as demand clustered in a few names.
On the Kosdaq, foreign money flowed into growth stocks, including semiconductor equipment, AI chip and biotech names, many of which surged. Jusung Engineering climbed 107.58%, while FADU rose 70.18% and Koh Young jumped 64.62%. Jeju Semiconductor (49.29%), Hana Micron (42.81%) and HPSP (28.61%) also advanced.
Many of the top net-bought Kosdaq names have shifted toward semiconductor equipment, materials and AI infrastructure, highlighting a growing focus on what investors see as core supply-chain plays within growth industries.
Analysts said foreign flows have been moving around two main themes: AI and semiconductors, and power infrastructure. They cited expanding data centers and rising demand for high-bandwidth memory, or HBM, as drivers lifting related shares. They added that concentrated buying in tech growth stocks has been evident on the Kosdaq, while the Kospi has seen steadier gains led by large-cap growth names.
Foreign investors net bought about 3 trillion won on May 4, the first trading day of the month. Many in the securities industry expect them to be the main force behind a potential Kospi move above 7,000. “Foreign investors continued net buying in May, following April, considering the Korean market’s earnings momentum advantage and relatively low valuation burden,” said Han Ji-young, a researcher at Kiwoom Securities. “They will be the supply-and-demand driver that brings the Kospi into the 7,000 range.”
Meanwhile, the average return for the 10 stocks most heavily net bought by individual investors was 18.3%. Of the top 10 net-bought names by individuals last month, eight posted gains from the end of March, while two declined.
* This article has been translated by AI.
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