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Foreign Investors Drive S. Korean Stocks to 6-Year High on Tech & Defense Bets

Foreign ownership of South Korean equities has surged to its highest level in nearly six years, reaching 37.18% of total market capitalization. The surge was driven by massive net purchases in the second half of 2023, particularly in semiconductor giant Samsung Electronics, followed by January's focus on shipbuilding, defense, and nuclear power stocks. The benchmark KOSPI index continues its rally, closing higher and briefly breaching the significant 5,000-point threshold. Strong institutional and foreign buying is overpowering net selling by individual investors, indicating sustained bullish sentiment.

Key Points: Foreign Ownership of South Korean Stocks Hits 6-Year Peak

  • Foreign ownership hits 37.18%
  • Semiconductors led 2023 buying spree
  • Shipbuilding, defense stocks popular in January
  • KOSPI nears 5,000-point threshold
  • Net foreign purchases exceed $9.7 billion in Samsung
2 min read

Foreign ownership of S. Korean stocks reaches highest in nearly 6 years

Foreign investors push S. Korean stock ownership to highest since 2020, fueled by massive buys in semiconductors, shipbuilding, and defense sectors.

"Foreign ownership of South Korean stocks as a share of total market capitalisation reached its highest level in five years and nine months in January. - Korea Exchange"

Seoul, Jan 25

Foreign ownership of South Korean stocks as a share of total market capitalisation reached its highest level in five years and nine months in January, driven by net purchases in the shipbuilding, defence and nuclear power industries, the main bourse operator said on Sunday.

Foreigners' stock holdings rose to 37.18 per cent of total market capitalisation on January 7, the highest level since April 9, 2020, when the rate was at 37.34 percent, according to data from the Korea Exchange (KRX), reports Yonhap news agency.

The increase largely came as offshore investors scooped up shares in the semiconductor sector in the second half of last year, followed by shares in the shipbuilding, defence and nuclear power sectors this month.

Foreign investors net purchased 14.1 trillion won (US$9.7 billion) worth of Samsung Electronics shares in the second half of last year alone.

This month, the most popular shares were Hanwha Ocean, Doosan Enerbility and Naver, in that order.

Investments in the shipbuilding and nuclear power sectors were driven by anticipation of large-scale orders amid an increase in global demand, while those in the defence industry were likely buoyed by the tension surrounding U.S. President Donald Trump's threat to acquire Greenland.

Meanwhile, South Korean stocks closed higher on Friday at a fresh peak, led by gains in technology and brokerage shares, after hitting another intraday record high. The Korean won increased against the U.S. dollar.

After a choppy session, the benchmark Korea Composite Stock Price Index (KOSPI) went up 37.54 points, or 0.76 percent, to close at 4,990.07.

Trade volume was heavy at 595.6 million shares worth 29.6 trillion won (US$20.2 billion), with winners far outpacing losers 677 to 212.

Institutions and foreigners purchased 491.2 billion won and 133.3 billion won worth of stocks, respectively, while individual investors offloaded a net 725.6 billion won alone.

The index opened sharply higher, briefly breaching the 5,000-point threshold for the second consecutive session and reaching an intraday record of 5,021.13.

- IANS

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Reader Comments

S
Sarah B
As someone who invests in Asian markets, this is a strong signal of confidence in Korea's industrial and tech sectors. The focus on semiconductors, shipbuilding, and nuclear power shows a strategic, long-term view. Good for the KOSPI!
P
Priya S
While it's great for Korea, we should learn from this. Our markets need to make it easier for foreign investors to participate meaningfully. Too much red tape sometimes. 🇮🇳 On the bright side, our IT and pharma sectors do get good foreign inflows.
V
Vikram M
The part about individual investors offloading while institutions and foreigners bought is classic retail investor behavior everywhere, including India. We often sell in panic or for quick profit, missing the long-term rally. A lesson in patience.
R
Rohit P
$9.7 billion in Samsung shares alone is massive! Shows the sheer scale of global capital. Hope some of that foreign investment appetite turns towards Indian manufacturing and green energy soon. We have the demand and the talent.
K
Karthik V
Respectfully, the article mentions Trump's threat to acquire Greenland as a reason for defence stock buys? That seems like a stretch from 2020. Current geopolitical tensions in our region (Asia) are a much bigger driver. Otherwise, solid economic news.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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