Foreign Investors Increasing Investment in Korean Software Stocks

Software companies’ stock prices are rising over and over. During the May 14 trading session, Kakao’s market cap exceeded that of Hyundai Motor Co. for the first time to rank ninth.

Specifically, the stock price of Kakao rose 3.93 percent to 225,000 won per share and its market cap reached 19,590.7 billion won in that trading session, in which the market cap of Hyundai Motor closed at 19,721.6 billion won. Kakao gained as much as 5.31 percent before the closing of the session.

Likewise, NCSoft rose 4.44 percent to surpass Hyundai Mobis and come in 13th in terms of market cap. This year, Kakao and NCSoft gained no less than 46.58 percent and 39.19 percent, respectively. Naver followed them with 17.43 percent.

Under the circumstances, foreign investors are increasing their investment in the companies. Their top net purchases for this year include Kakao (279 billion won), NCSoft (193.9 billion won) and Netmarble (73.1 billion won) instead of Samsung Electronics and SK Hynix.

“Semiconductor stocks constituted more than 80 percent of foreign investors’ IT shareholding in the South Korean market from 2014 to 2019, but the current ratio is around 76.6 percent,” said Hanwha Investment & Securities research analyst Ahn Hyun-kook, adding, “Meanwhile, their current software shareholding ratio is at a record high of 16.6 percent.”