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Foreign Investors Increase Their Holdings in Samsung, Hyundai and SK While Unloading LG Shares
Foreign Investors
Foreign Investors Increase Their Holdings in Samsung, Hyundai and SK While Unloading LG Shares
  • By matthew
  • February 20, 2013, 10:12
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The proportion of foreign holdings in affiliates of major domestic corporations has increased in the past year. Out of the country’s top four groups – Samsung, Hyundai Motor Group, SK and LG – only LG saw a drop in foreign ownership of shares.

According to a report released by the Korea Exchange (KRX) on February 19, foreign investors accounted for 21.75% of all shares of listed affiliates of major domestic corporations such as Samsung, Hyundai Motor Group, SK, and LG as of February 15, compared to 20.81% for the same period last year. Samsung Group recorded the sharpest increase in foreign holdings. Foreigners made up an average of 27.26% of all shares of 17 Samsung affiliates, up 2.54% points compared to 24.72% for 2012. Both Hyundai Motor Group and SK Group saw a modest rise in foreign holdings – from 22.71% to 24.37%, and 13.48% to 13.91%, respectively.

In contrast, LG was the only company out of the big four to witness a drop in foreign ownership. The rate fell slightly, to 22.26% from 23.69% last year.

By affiliate, among Samsung subsidiaries, Shilla Hotel recorded a sharp increase in foreign holdings to 36.4% from 20.88%, and Samsung SDI also registered a rise to 22.81% from 16.34%. At S-1, foreign ownership grew to 49.7% from 42.98%, approaching 50%. Samsung Electronics, however, saw a modest drop in foreign holdings from 50.99% to 50.32%. Out of Samsung’s 17 listed affiliates, only four – Samsung Electronics, Samsung Fine Chemicals, Samsung Card, and Credu -- witnessed a scaling back of the proportion.

Among affiliates of Hyundai Motor Group, Hyundai Wia saw its foreign ownership soar to 17.54% from 5.58%. Foreign holdings at Hyundai Mobis expanded to more than half of all holdings to 50.02% from 45.99%. In contrast, Hyundai’s steel affiliates – Hyundai Steel and Hyundai Hysco – both saw a drop in foreign ownership, from 21.25% to 18.97%, and 28.09% to 20.51%, each. Among SK Group affiliates, SK Hynix drew attention with foreign holdings curtailed to 25.62% from 28.52%.

Out of LG Group’s 11 listed affiliates, all except LG U+,GⅡR, LG Life Sciences, and LG Hausys saw a drop in foreign holdings. LG Electronics suffered the steepest decline of 8.26% points, followed by LG International, which witnessed a 7.03% drop. By contrast, LG U+ and LG Life Sciences saw foreign ownership expand, from 17% to 23.83%, and 8.13% to 10.24%, respectively.

It appears that the changes in the proportion of foreign holdings vary by industry. All companies engaged in the information technology industry where massive selling by foreigners occurred this year witnessed a drop in foreign holdings. The same was true for the steel industry, which is struggling amid sluggish sales.

One securities firm analyst said, “Last year, it was LG Electronics that saw the largest amount of selling by foreign investors,” and went onto predict, “If major LG affiliates could turn around its operations this year, the proportion of foreign holdings could rise again.”