Foreign investors are pulling back from large-cap stocks in the South Korean market. Following a peak in June, the KOSPI has shown a downward trend, with foreign ownership percentages in the top 10 KOSPI stocks declining across the board.
According to data from the Korea Exchange, from July 1 to November 11, the foreign ownership percentage in all top 10 KOSPI stocks fell. The largest decline was seen in Samsung Electro-Mechanics, where foreign ownership dropped from 39.73% on July 1 to 35.33% on November 11, a decrease of 4.40 percentage points. During the same period, SK Hynix's foreign ownership fell from 50.36% to 48.02%, a drop of 2.34 percentage points, while KB Financial's ownership decreased from 80.06% to 77.95%, down 2.11 percentage points.
Samsung Electronics, a representative of the domestic stock market, also saw its foreign ownership decline from 46.96% to 45.93%, a decrease of 1.03 percentage points. The number of shares held by foreign investors decreased by approximately 60.24 million for Samsung Electronics and about 8.16 million for SK Hynix. Other companies, including Samsung Electronics Preferred (down 1.65 percentage points), Hyundai Motor (down 0.76 percentage points), and Samsung Life (down 0.54 percentage points), also experienced reductions in foreign ownership. Expanding the scope to the top 50 stocks, 33 (66%) saw a decline in foreign ownership.
Alongside the drop in foreign ownership, stock prices also fell significantly. Among the top 10 stocks by market capitalization, nine saw price declines, with the exception of Samsung Biologics, which rose by 2.44%. Samsung Electro-Mechanics experienced the largest drop at 58.14%, followed by SK Square (-54.70%), SK Hynix (-50.12%), Hyundai Motor (-44.10%), and Samsung Electronics (-34.50%).
The reduction in foreign ownership was also evident across the entire KOSPI market. According to the Korea Exchange, the foreign ownership percentage relative to the total KOSPI market capitalization fell from 40.59% on July 1 to 38.17% on November 10, a decrease of 2.42 percentage points. During the same period, the market capitalization of shares held by foreign investors dropped from 2,754 trillion won to 1,651 trillion won, a decline of approximately 1,103 trillion won.
Market analysts suggest that the selling pressure from foreign investors has been concentrated on large semiconductor stocks, contributing to increased market volatility and prompting long-term investors to withdraw. Kwon Soon-ho, a researcher at Daishin Securities, stated, "The volatility driven by short-term trading funds is causing long-term capital to exit, which in turn exacerbates the decline. If leverage positions decrease and volatility subsides, there will be renewed capacity for long-term capital allocation." He added that conditions for the reinvestment of foreign funds include a further decline in the KOSPI volatility index (VKOSPI), a reduction in net selling by UK accounts, and a recovery of positions by overseas leveraged funds.
Meanwhile, on this day, the KOSPI closed at 5,342.73, down 32.63 points (0.61%) from the previous trading day. Foreign investors net purchased 370.5 billion won, but institutional investors sold a net 691.2 billion won, leading to the index's decline. Individuals also sold a net 204 billion won. The KOSDAQ also closed down 8.57 points (1.22%) at 696.53.
* This article has been translated by AI.
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