Foreign investors remain partial to bellwether stocks on the Korean bourse despite strong performance and reputation of other industry players.

According to market data provider FnGuide on Sunday, foreign stockholding in semiconductor, chemistry, automobile and cosmetics sectors has demonstrated extremely different patterns among the firms in the sectors over the recent two months.

In the semiconductor segment, foreigners have net purchased 299.7 billion won ($265 million) worth shares of the world’s largest memory chip maker Samsung Electronics Co. over the last two months, but have net sold 234.3 billion won worth stocks of SK Hynix Inc. during the same period.

Offshore investors have also gobbled up 54.6 billion won worth of Lotte Chemical Corp. shares, but have dumped 80 billion won worth stocks of LG Chem Ltd. Lotte Chemical is expected to have earned 776.9 billion won in operating profit in the third quarter of this year ended September, while LG Chem 737.9 billion won. Earnings of the two companies that depend on prices of chemical products often change the position of the sector leader and runner up. However, the price-earnings ratio (PER) measuring the earnings per share, for LG Chem is currently estimated at 13.6, more than doubled from 6.1 of Lotte Chemical. Market analysts said LG Chem’s shares have been overvalued after its differentiated business portfolio has actively attracted investors.

The bellwether in the refinery business SK Innovation’s stock price has also risen 10.3 percent over the last two months, while shares of GS, that owns the unlisted second runner GS Caltex Corp., have fallen 4.4 percent. Foreigners have net bought 57.8 billion won worth shares of SK Innovation alone.

In the automobile industry, overseas investors have picked up shares of Hyundai Motor Co. worth 251.9 billion won but thrown away stocks of its smaller sibling Kia Motor Corp. worth 31.1 billion won. Hyundai Motor is expected to have earned 1.19 trillion won in operating profit in the July-September period, up 11 percent from a year ago, thanks to its robust sales in the domestic market that successfully offset the losses in China and the United States. During the same period, shares of Hyundai Motor jumped 4.5 percent, while those of Kia Motors plunged 11.4 percent.

The cosmetics business is another sector where foreign investors have been picky. LG Household & Health Care is estimated to have earned 243.1 billion won in operating profit in the third quarter, more than twice as much as AmorePacific’s 104.7 billion won. The gap has widened further from a year ago. Reflecting the huge difference in profit, foreigners over the recent two months have net sold 141.5 billion won shares of AmorePacific, a stark contrast to last year when it attracted the most overseas investors as a listed firm. Stock prices of LG Household & Health Care alone surged 10.2 percent.

By Moon Il-ho and Lee Ha-yeon

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