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Samsung shares hit historic high as foreign investors scoop up net $2.3 bn

Nov 13, 2020 (Gmt+09:00)

Samsung Electronics Co. shares have soared to a historic high, driven by foreign investors scooping up a total net 2.6 trillion won ($2.3 billion) worth of shares in a six-day buying streak between Nov. 5 and 13.

The South Korean tech giant's share price closed at 63,200 won ($57) on Nov. 13 with foreign investors snatching up a net 578.5 billion won ($518.7 million) worth of shares on the same day.

Global investment firms JP Morgan and Merrill Lynch each picked up 3.41 million and 2.22 million shares, respectively. Meanwhile, individual investors made gains by selling off a net 2.9 trillion won worth of shares.



Samsung Electronics' share price has returned to its pre-coronavirus days. The robust share price movement steered by foreign investors is owing to anticipation over recovering business conditions in the semiconductor industry, dividend increases and capital inflow into emerging markets.

The semiconductor industry is expected to fare well next year backed by increasing demand for DRAM chips, which has put global chipmakers such as Samsung Electronics and SK Hynix Inc. on the radar.

Also, the price merit of the company's stock factored into investor sentiments given that it rose 13.26% this year, a relatively low growth rate compared to the spike in battery, bio and internet stocks.

Market watchers say other external factors such as the anticipated capital inflow into emerging markets, exchange rates and interest rates also influenced the company's share price.

US President-elect Joe Biden's administration is likely to usher in a weak dollar against strong emerging market currencies. Also, is market chatter over a rebound in US interest rates, leading to offshore passive funds increasing their emerging market portions.

These external factors point to the likelihood of foreign investors continuing their buying of Samsung Electronics shares as the Korean bourse will offer exchange rate gains. 

Foreign investors' shareholding of Samsung Electronics climbed from 54.92% in March to 56.29% as of Nov. 12. Given that foreign investors accounted for around a combined 57% stake prior to the COVID-19 pandemic, there remains around 30 million shares, or 0.5 percentage points, to be purchased.

The strong buying trend led by foreign investors is likely to have a ripple effect as Samsung Electronics accounts for a substantial portion of the Korean stock market. The rise in Samsung Electronics' shares may also lift the country's benchmark Kospi index.

Securities firms have set an average share price target of 76,500 won for the tech giant.

Write to Yun-sang Koh and Eui-myung Park at kys@hankyung.com

Danbee Lee edited this article

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