Foreign KOSPI cumulative net selling exceeds 203 trillion won... Protected by net purchases of KRW 64 trillion from other corporations
Samsung Electronics completes 15 trillion won share purchase, SK Hynix also executes 89%... Interested in follow-up purchasers
KOSPI, which had been holding on in anticipation of large-scale share buybacks by two top semiconductor companies, stumbled under strong selling by foreign investors. As Samsung Electronics completed its share purchase worth 15 trillion won and SK Hynix also executed about 90% of its 40 trillion won plan, the capacity for large-scale purchases that had been absorbing foreign stocks has been greatly reduced. With the cumulative net selling by foreign investors exceeding 203 trillion won this year, attention is focused on whether investment entities that can replace corporate buying will emerge.
According to the Korea Exchange on the 13th, KOSPI ended trading at 6035.35, down 348.89 points (5.46%) from the previous trading day. On this day, foreign investors net sold approximately 4.533 trillion won in the stock market. About 94% of the sales volume was concentrated in the electrical and electronics industry, leading the decline of the semiconductor index.
The number of stocks sold by foreign investors on KOSPI this year exceeded 203 trillion won. The large-scale share buybacks of Samsung Electronics and SK Hynix have received a significant portion of foreign sales, but as the purchase plan enters its final stage, changes in the market supply and demand structure have become inevitable.
Other corporations that have accepted properties for sale from foreign investors… Buying focused on semiconductors
As a result of compiling trading trends by investors on the Korea Exchange, foreign investors net sold 203.6494 trillion won in the KOSPI market from January 2 to October 13 this year. This amount excludes ETF, ETN, and ELW.
During the same period, individuals net purchased KRW 100.4741 trillion, other corporations net purchased KRW 64.1741 trillion, and institutions net purchased KRW 38.2711 trillion. In other words, domestic investment entities received a share of the volume poured in by foreign investors.
In particular, the scale of net purchases by other corporations is notable. Other corporations are a category of investors that reflect stock acquisition transactions of general business companies, and the large-scale stock purchases conducted by Samsung Electronics and SK Hynix this year had a significant impact on supply and demand.
The buying trend focused on semiconductor stocks can also be confirmed in the supply and demand of individual stocks. From August 20 to September 28, other corporations made net purchases of 40.7531 trillion won in two stocks, Samsung Electronics and SK Hynix. During the same period, the combined net selling amount by foreign investors and individuals was 39.3035 trillion won.
By absorbing the semiconductor stocks offered by foreign investors and individuals, the company's share buybacks played a role in reducing the downward pressure on the stock price. It is considered a characteristic trend in the supply and demand of semiconductors this year in that, unlike general investment demand, companies purchased stocks according to a pre-determined purchase plan.
Samsung Electronics completes purchase of 15 trillion won... Hynix also executed 89%
The problem is that this buying trend is difficult to continue.
Samsung Electronics announced on the 12th that it had completed the purchase of 15 trillion won worth of shares by the 6th. Samsung Electronics' stock repurchase, which served as a major purchaser during the intensifying foreign selling this year, has come to an end.
The situation is similar at SK Hynix. Of the approximately 40 trillion won share repurchase plan promoted by the company, 35.7295 trillion won was executed as of the 12th. This corresponds to approximately 89.3% of the total plan.
The remaining purchasing capacity is approximately 4.2705 trillion won. The purchase has not been completely completed, but since most of the funds have already been invested, it is difficult to expect a purchase trend of the same scale as before.
The two companies' share buybacks have the meaning of creating actual stock demand in the market, independent of the semiconductor industry situation or performance outlook. This is because even if foreign selling continues, the company purchases a certain amount of stocks, thereby relieving the burden of selling.
However, as Samsung Electronics' purchase ended and SK Hynix's remaining volume decreased, the supply and demand base to receive foreign selling became weaker than before. Even if performance expectations for semiconductor companies are maintained, stock price volatility may increase if there are a lack of investors willing to buy stocks.
Who will buy the shares after the stock repurchase? Pension funds and investment trusts are net sellers
As corporate share purchases are decreasing, attention is shifting to the ability of institutional investors and individuals to purchase additional shares.
This year, institutions as a whole recorded net purchases of KRW 38.2711 trillion, but there are differences in the flow by detailed investment entity.
Financial investments net bought 69.2204 trillion won, while pension funds net sold 9.0758 trillion won, insurance 7.2292 trillion won, and investment trusts net sold 6.9669 trillion won.
This is why it is difficult to say that long-term investment funds are steadily flowing into the stock market solely through net purchases by all institutions. Since the purchase of financial investments reflects various transaction purposes, it is difficult to interpret them in the same way as the long-term investment demand of pension funds or stock funds.
Individuals made net purchases of stocks worth more than 100 trillion won this year, absorbing foreign sales. However, in a situation like today where foreign selling is concentrated in the amount of trillions of won per day, the limitations of preventing the index decline with individual buying power alone have been revealed.
The key to future supply and demand lies in how much foreign selling pressure subsides and whether institutional investors such as pension funds and investment trusts can make up for the decrease in share purchases.
Share purchases by Samsung Electronics and SK Hynix have served as a significant buffer in a market where foreign selling pressure is concentrated. Now, with direct purchases by companies decreasing, the domestic stock market has entered a phase where performance expectations must be linked to actual investment demand.
