Samsung, SK hynix trade unevenly after foreign exodus

Samsung Electronics and SK hynix began the week trying to recover from a two-day collapse that ended on Friday, Nov 6. Foreign investors were at the center of that rout, pulling trillions of won out of Korea’s two big memory chipmakers in a single week.

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A shaky start to the week

Both stocks gained more than 1% in premarket trading on Monday, Nov 9, Seoul Economic Daily reported. Seoul Economic Daily credited bargain hunting for the early lift. Traders were stepping in after the KOSPI, Korea’s main stock index, lost 6% on Nov 6. The index closed that session down 6.02%.

The Chosun Daily reported that the KOSPI recovered some ground on Monday, with Samsung and SK hynix leading the move higher. Prices swung sharply, and the index was fighting to hold on to the 5,000-point mark, according to The Chosun Daily.

Signals from abroad did not settle the question. A rebound in U.S. technology shares sent mixed messages to Seoul, The Chosun Daily said. Analysts cited by The Chosun Daily cautioned that the sharp swings could continue.

The early strength did not last evenly. By 11:32 KST (Korea Standard Time) on Monday, the two chipmakers were moving in different directions, Maeil Business Newspaper reported. Maeil Business Newspaper described the losses of the previous week as a two-day plunge.

The second of those two days was steep. On Nov 6, the day of the second heavy KOSPI drop in a row, SK hynix fell 10.44% to close at 1,132,000 won (about US$834.44). Samsung Electronics lost 6.35% in the same session and finished at 188,700 won (about US$139.10).

Those closes are where Monday’s trading started. A move of more than 1% before the open was small next to Friday’s double-digit loss in SK hynix. The two stocks carry heavy weight in the KOSPI, which is one reason the index tends to swing with them, as Pacific Tape’s guide to why the KOSPI is so volatile sets out.

Foreign money heads for the exit

Foreign investors’ net selling of Samsung Electronics and SK hynix shares came to more than 7.6 trillion won over the past week, according to Seoul Economic Daily and BusinessKorea. BusinessKorea put the outflow at about US$5.61 billion.

The selling left a mark on who owns Samsung. Foreign ownership, the portion of a company’s shares held by investors based outside Korea, dropped to its lowest level in 17 years at Samsung, Seoul Economic Daily reported.

The outflow was not limited to the two chipmakers. On Nov 6 alone, foreign investors’ net selling across all shares listed on the KOSPI reached 2,626.8 billion won (about US$1.94 billion). That figure covers the whole market for a single day. The 7.6 trillion won figure covers only Samsung and SK hynix, over several sessions. The two numbers measure different things and do not add up to one another.

Foreign investors’ trading in Korean stocks is published daily, and it is often followed closely by traders in Seoul because of its size. Pacific Tape explains how those flows move the KOSPI and where to check them.

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Information only, not investment advice.