South Korean retail investors restricted their offshore stock choices to top two U.S. stocks Apple and Microsoft last month.
Koreans net purchased $29 million of Microsoft and $27.5 million of Apple in November alone, according to Korea Securities Depository on Monday.
Other heavyweight stocks that had so far been strong buys turned into net sells. Koreans sold a net $22.6 million and $6.21 million of U.S. chip giants Advanced Micro Devices (AMD) and Nvidia, respectively, last month, weighed by concerns about the prolonged downturn in the semiconductor industry.
Korean investors cherry-picked Apple and Microsoft as these $1 trillion market-cap stocks have been leading the U.S. market rally. Apple shares jumped 67 percent this year, making it the best performer on the Dow Jones Industrial Average. Microsoft came second with a 47 percent gain.
Microsoft has been a favorite among Korean investors since early this year while Apple started getting picked up in the latest quarter. Apple shares had been in the doldrums since late 2018 and early this year due to sagging demand for its flagship iPhones. Slowing sales in its bedrock business caused Apple to briefly lose its title as the world’s most valuable company to Microsoft. But its shares started refreshing all-time highs in the latter half on increased optimism for its service offerings, including the new streaming service Apple TV+.
This anticipation of strong profitability has been the key driver of Apple shares, according to Kim Rok-ho, an analyst at Hana Financial Investment. “Apple’s service-related revenues rose 23 percent compared with last year. Operating margin for services and software is around 60 percent, double that of hardware like iPhones,” he explained.
Korean investor sentiment toward Microsoft has also surged last month after the company won Pentagon’s $10 billion cloud computing contract, beating out market leader Amazon.
By Kim Je-lim and Kim Hyo-jin
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]