Foreign investors who mostly sold more than buying Korean shares throughout the year show signs of a shift in investment strategy for bargain hunting.
Cross-border investors purchased a net 960.6 billion won ($825.4 million) worth stocks on Kospi from Sept.1 to 7, turning to net buyers for five consecutive trading days from Aug.31 to Sept.6. They bought up chip stocks such as Samsung Electronics and SK Hynix and new entrants Kakao Bank and Krafton while unloading battery makers such as LG Chem and Samsung SDI.
Kiwoom Securities said Tuesday that foreigners are expected to load up with Korean stocks in the fourth quarter when economic uncertainty is alleviated with the Fed’s tapering. “Concerns on the Fed’s timing of tapering, rising inflation and economy reaching its peak would start to be eased at the end of the third quarter,” said Kiwoon Securities analyst Han Ji-young, predicting that foreigners could turn buyers of Korean stocks in late this year.
Kiwoom Securities forecast that overseas investors would snap up large-cap companies with outlook on strong earnings. Kospi would also get a boost if foreigners shift to buying.
The expected recovery in the chip industry would also attract foreigners to the Korean market. Lee Kyung-min, an analyst from Daishin Securities, said overseas investors could show a buying trend if Samsung Electronics posts an improved earnings guidance in October on global chip market recovery.
But others predict foreigners won’t easily shift to net buying.
“Offshore investors may not shift to net buying unless Kospi falls further or the U.S. dollar begins to weaken,” said Jung Yong-taek, head of research division at IBK Investment Securities.
By Shin Yoo-kyung and Choi Mira
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