Companies with Top 60% Market Cap See Increased Foreign Ownership

It has been found that the foreign ownership percentage of top market capitalization stocks has increased this year. Notably, foreign investors have extended their financial commitments into the domains of defense and construction.

According to data released by the Korea Exchange on Aug. 2, the number of stocks with increased foreign ownership this year totaled 58 among the top 100 stocks by market capitalization as of the end of July.

While the foreign ownership share of the KOSPI and KOSDAQ markets rose from 27.41 percent to 27.63 percent within the same period, more than half of the top market capitalization stocks saw an increase in foreign ownership. Foreign investors acquired approximately 10.87 trillion won (US$8.36 billion) worth of shares in the domestic stock market this year.

The stock with the most significant increase in foreign ownership is JYP Entertainment. The foreign ownership percentage jumped by 13.15 percentage points to 47.17 percent from 34.02 percent at the end of last year. Foreign investors’ net purchases for this stock amounted to 422.9 billion won, making it the second-most-purchased stock on the KOSDAQ market after EcoProBM.

Foreign investors also increased their investment in the defense sector, which has high expectations for overseas contracts. Among them, Hanwha Aerospace, a major defense company, recorded a foreign ownership percentage of 33.81 percent, marking an increase of 9.96 percentage points from 23.85 percent at the end of last year. Hyundai Rotem also saw growth from 7.05 percent to 12.34 percent, an increase of 5.29 percentage points during the same period.

Construction companies also saw an increase in foreign ownership. Samsung Engineering and Doosan Bobcat witnessed substantial upward surges in their foreign ownership rates, ascending from 41.94 percent to 49.85 percent and from 29.20 percent to 36.55 percent, respectively.

On the other hand, POSCO Group and telecommunications stocks experienced a significant decrease in foreign ownership. In particular, POSCO Holdings saw a reduction from 51.40 percent to 30.19 percent, marking a staggering decrease of 21.21 percentage points. The largest decrease in foreign ownership occurred for this company. During this period, foreigners sold 8.6451 trillion won worth of POSCO Holdings shares. POSCO International also saw a drop from 8.72 percent to 5.03 percent.

Among telecommunications firms, foreign ownership percentages for SK telecom and KT witnessed substantial erosion, declining from 45.60 percent to 41.59 percent and 43.03 percent to 39.60 percent, respectively.

The foreign ownership proportion in the domestic stock market is currently below previous levels. According to SK Securities, the current foreign ownership ratio within the KOSPI index, standing at approximately 32 percent, is lower than the 5-year average ownership ratio of approximately 34 percent.