Samsung, SK hynix stocks rebound in strongest pace since beginning of year

2021.11.23 10:00:55 | 2021.11.23 15:39:52

[Graphics by Song Ji-yoon]이미지 확대

[Graphics by Song Ji-yoon]

Shares of South Korea’s memory giants Samsung Electronics Co. and SK hynix Inc. rose by their biggest pace since last winter on Monday on heavy foreign buying to signal return of positiveness in the chip cycle.

Samsung Electronics closed 5.2 percent higher at 74,900 won ($63.01) on Monday and SK hynix 7.17 percent at 119,500 won.

The last time Samsung Electronics shared rose over 5 percent was on Jan. 8. SK hynix also gained over 7 percent for the first time since Feb. 25.

Shares of Samsung Electronics finished Tuesday up 0.53 percent at 75,300 won while SK hynix ended 0.42 percent lower at 119,000 won.

Their gains pushed up benchmark Kospi, which finished 1.42 percent higher at 3,013.25 on Monday.

Shares of the top memory chipmakers soared as foreigners net purchased 428.2 billion won worth of Samsung Electronics shares and 283.3 billion won worth of SK hynix shares. It is the largest foreign net buying since early August in case for Samsung Electronics and early April for SK hynix.

The previous days offshore investors net bought over 500 billion won worth of Samsung Electronics shares this year were on January 8 (602.8 billion won), February 25 (694.7 billion won), April 2 (504.4 billion won), August 3 (626 billion won), and August 4 (528.5 billion won).

[Graphics by Lee Eun-joo and Song Ji-yoon]이미지 확대

[Graphics by Lee Eun-joo and Song Ji-yoon]

Foreigners net bought over 200 billion won worth of SK hynix shares four times this year – on February 19 (243.8 billion won), February 25 (307.3 billion won), March 11 (253 billion won), and April 1 (345 billion won).

Shares of bellwether chip names started to sink in August when foreign brokerage Morgan Stanley lowered investment opinion on Korean chip stocks and industry in a report titled “Memory – Winter is coming.” It also sharply pulled down their target stock price.

Foreigner returned to buying in chip stocks amid easing in the skepticism about oversupply.

U.S. chip stock Micron surged 8 percent, strongest in a year, last weekend.

U.S. investment bank Evercore projected Micron stock to gain further on projection that expectations for a slowdown in first half performance next year has been reflected in the price. Citigroup also noted that price adjustment in DRAM market is in its last stage and that PC manufacturers’ demand for DRAM memory has increased.

Some analysts projected stronger demand from big tech firms like Microsoft and Meta to back their heavy bet on metaverse.

U.S. chip equipment manufacturer Applied Materials in its earnings said that “demand for semiconductors and equipment continues to grow as the pandemic accelerates digital transformation of the economy, and currently, our supply chain cannot keep up.”

Hwang Min-sung, a researcher at Samsung Securities, said that fall in DRAM price in the first quarter next year will be limited

By Kang Bong-jin and Lee Eun-joo

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