Foreigners Pour $2.5 Billion Into Samsung, SK Hynix as Kospi Hits Record

Foreign investors fled the Kospi market like a receding tide after war broke out between the US and Iran last month. They dumped 35 trillion won worth of shares on the Korea Exchange as investors locked in profits after a short-term rally and risk aversion intensified because of the conflict.

That selling trend reversed on April 7, when Samsung Electronics released its first-quarter earnings. Foreign appetite for Korean stocks revived after Samsung reported operating profit of more than 57 trillion won, providing the biggest boost for the Kospi to break above its previous high for the first time in about 50 days.

On April 21, the Kospi rose about 2.5% intraday to a record 6,376.28. It topped the previous closing high of 6,307.27 set on Feb. 26 and the prior intraday high of 6,347.41 reached early the following day.

Foreign investors drove the latest record by turning net buyers of more than 1 trillion won on April 21. As of 1:20 p.m., they had bought a net 266.7 billion won of SK Hynix and 204.9 billion won of Samsung Electronics, including preferred shares. They also bought Samsung Electro-Mechanics and POSCO Holdings, with net purchases of 98 billion won and 97.4 billion won, respectively.

Foreign investors began buying Kospi stocks in earnest on April 7. Korea Exchange data showed they were net sellers of 125.4 billion won from April 1 to April 6, before switching to net purchases of 5.7915 trillion won from April 7 to April 21. An 11-session net-selling streak that began on March 19 ended on April 4. Since April 7, foreigners have been net buyers in eight of 11 trading sessions.

The buying was concentrated in chip stocks. Since April 7, foreign investors have bought 2.4128 trillion won of SK Hynix and 1.0946 trillion won of Samsung Electronics, including preferred shares. Strong demand followed earnings surprises from semiconductor companies. Samsung said on April 7 that first-quarter operating profit reached a record 57.2 trillion won. Brokerages are also expecting solid results from SK Hynix, which is due to release preliminary first-quarter earnings on April 23.

According to Epic AI, an AI-based investment information service, consensus estimates put the two companies' combined operating profit for this year at well above 500 trillion won. Samsung is forecast to post 305.2637 trillion won, while SK Hynix is expected to earn 208.5116 trillion won. Expectations for strong earnings have also strengthened after the Korea Customs Service said on April 21 that semiconductor exports jumped 183% from a year earlier in data covering April 1 to April 20.

Some analysts say the war is no longer a key variable for the stock market. International oil prices, which had surged well above $100 a barrel, are now fluctuating around $80 to $90, reducing the market's sensitivity to the conflict. Han Ji-young, an analyst at Kiwoom Securities, said the market expects ceasefire talks to eventually conclude despite difficulties. The focus is shifting increasingly toward earnings.

Kang Jin-gyu, Hankyung.com reporter josep@hankyung.com