Foreign ownership in Samsung Electronics returns to preceding levels

2023.05.22 14:40:02 | 2023.05.23 10:01:06

[Photo by MK DB]이미지 확대

[Photo by MK DB]

Foreign ownership of Samsung Electronics Co. shares has rebounded to levels seen over a year ago, driven by mounting expectations of an improvement in semiconductor inventory and the continued buying interest from investors.

According to data from the Korea Exchange on Monday, foreign ownership of Samsung Electronics shares reached 52.08 percent as of May 19. This marks a significant milestone as it is the first time since March 4 last year, when the rate stood at 52.05 percent, that it has entered the 52 percent range.

The decline in foreign ownership of Samsung Electronics last year was primarily influenced by concerns surrounding an economic slowdown triggered by rapid rise in interest rates. Foreign investors responded by embarking on a selling spree of Samsung Electronics shares to fall below 50 percent for the first time in six years on June 17 last year, and it came to its lowest point at 49.24 percent on Sept. 29.

However, a notable shift began to occur this year as foreign investors reversed their stance and turned to net buying of Samsung Electronics shares. Since the beginning of the year, foreign investors have made net purchases of Samsung Electronics shares worth a staggering 9.13 trillion won ($6.93 billion). This trend has become even more pronounced in recent times, with foreign investors buying 1.29 trillion won worth of shares this month alone.

Foreign investors’ concentrated net buying of Samsung Electronics, a company that accounts for 20 percent of the total market capitalization of Kospi, has not only bolstered the foreign ownership of the company but has also facilitated a recovery in the foreign ownership proportion within the entire Kospi market. After more than a year, the foreign ownership proportion has now reached the 32 percent range.

The robust performance of Samsung Electronics’ stock price has also contributed to the positive sentiment among foreign investors. Since the beginning of this year, the stock has recorded a 25 percent increase. On Monday, it rose to its intraday high of 69,000 won, inching closer to the significant threshold of 70,000 won and marking a new 52-week high.

Analysts believe that the memory semiconductor market is poised for stabilization around the second half of this year, which has further propelled the recent stock gains. The positive outlook is underpinned by expectations of improved supply-demand dynamics in the memory semiconductor market. Notably, Samsung Electronics, along with SK Hynix Inc. and Micron, the three major players in the memory industry, have all implemented production cuts, which is anticipated to alleviate the current supply glut, Doh Hyun-woo, an analyst at NH Investment & Securities Co., said in a report on Monday.

“As Samsung Electronics and SK hynix join in production cuts along with Micron, oversupply in the memory market is expected to improve from the third quarter, and the two Korean memory chip makers are expected to benefit from the recovery in market demand starting in the third quarter,” Doh said.

By Pulse

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