Seoul, Oct 5: Foreign investors have pulled more than 20 trillion won (around $15.1 billion) from South Korea’s KOSPI market over the past month, as profit-taking in major semiconductor stocks and growing global uncertainties prompted overseas investors to reduce their equity exposure.
According to data from the Korea Exchange and Yonhap Infomax, foreign investors recorded net sales of 20.31 trillion won between September 1 and October 2. They were net buyers in only seven of the 22 trading sessions during this period, highlighting the strength of the selling pressure.
The heaviest selling came on September 28, when foreign investors sold more than 3 trillion won worth of shares in a single session. Their overall holdings now account for about 39.66% of KOSPI market capitalisation.
Semiconductor Giants Lead the Sell-Off
South Korea’s leading semiconductor companies have borne much of the pressure.
Foreign investors sold a combined 17.2 trillion won of shares in SK hynix and Samsung Electronics during the period. Net selling in SK hynix stood at 12.01 trillion won, while Samsung Electronics saw net foreign sales of 5.19 trillion won.
The selling has also reduced foreign ownership in both companies. Foreign ownership of SK hynix fell to 49.76% on October 2, its lowest level in more than three years. Samsung Electronics’ foreign ownership ratio declined to 46.40% on September 30 and stood at 46.41% thereafter.
Market analysts said investors appear to be booking profits after the strong performance of semiconductor stocks earlier this year. The broader investment environment has also become more challenging, with concerns over global interest rates and geopolitical tensions adding to market volatility.
Foreign Selling Begins to Slow
There are, however, some early signs that the selling spree could be losing momentum.
Foreign investors returned as net buyers on October 1, purchasing about 243 billion won worth of KOSPI shares. On October 2, their net selling was limited to around 190 billion won, significantly lower than the large outflows seen during September.
Market participants see the moderation as a potentially positive development. A stabilisation in long-term interest rates and an improvement in global risk sentiment could help bring greater balance to the market’s supply and demand.
Earnings to Provide the Next Major Signal
The upcoming third-quarter earnings season is expected to play an important role in determining whether foreign investors return to South Korean equities.
US chipmaker Micron Technology’s stronger-than-expected results on September 30 have already provided some encouragement to the semiconductor sector. Investors are now looking ahead to Samsung Electronics’ preliminary third-quarter results, due on October 8, for further evidence on earnings strength and chip-sector demand.
Analysts believe foreign buying could return once macroeconomic uncertainty begins to ease and corporate earnings offer greater confidence.
Kiwoom Securities researcher Han Ji-young expects foreign demand to improve as major economic risks become clearer and earnings visibility strengthens. Yuanta Securities researcher Lee Jae-won also pointed to the recent reduction in selling during market rallies as a sign that supply-demand conditions could gradually improve.
For South Korea’s stock market, the focus now shifts from the recent foreign selling wave to earnings, interest rates and global risk factors. If these pressures begin to stabilise, the latest moderation in outflows could mark the early stages of a more balanced market environment.
