Foreign investors bought 5.12 trillion won (US$4.2 billion) worth of Samsung Electronics and SK Hynix shares this year. Institutional investors also bought 3.8 trillion won (US3.2 billion) worth of the two companies’ stocks.
Samsung Electronics and SK Hynix ranked first and second in net buying volume of foreign and institutional investors in 2019, Korea Exchange said on Dec. 30. Thanks to stock purchases by foreigners and institutional investors, Samsung Electronics’ stock price closed at 55,800 won (US$48) on Dec. 30, up 44.19 percent compared with the beginning of this year. SK Hynix also recorded a 55.54 percent increase by closing at 94,100 won (US$81).
Last year, both stocks showed a lackluster performance due to concerns about a slowdown of the semiconductor market. In 2018, foreigners sold 4.92 trillion won worth of Samsung Electronics stocks, the largest amount in the stock market. Institutional investors also dumped 3.51 trillion won worth of Samsung Electronics shares. As a result, Samsung Electronics closed at 38,700 won (US$33) at the end of last year, down 24.06 percent. During the same period, SK Hynix also fell 20.92 percent, closing at 65,500 won (US$56), as institutional investors sold 1.18 trillion won (US$1.1 billion) worth of its shares, the second largest after Samsung Electronics.
However, as risks from the U.S.-China trade dispute eased and expectations rose for a rebound in the semiconductor market in the second half of 2019, foreigners and institutional investors focused on the two stocks. This trend is expected to continue into next year.
Kim Hyung-ryul, head of the Research Center at Kyobo Securities predicted that the aggregate operating profit of Korean companies put together will rise from 142 trillion won (US$122 billion) this year to 182 trillion won (US$157 billion) in 2020. He divided the top 10 sectors that are expected to improve operating profit into four groups: high-growth IT sectors (semiconductors, software and IT hardware); sectors expected to attain profit turnarounds (displays, shipbuilding, transportation and utilities); sectors expected to benefit from eased risks from the U.S.-China trade dispute (energy and chemistry); and the sector where individual risks are expected to be eased and investment sentiment is expected to recover (healthcare).