By Samsung Electronics, South Korea’s leading semiconductor manufacturer, has experienced a dramatic ₩90 trillion ($66.6 billion) decline in market capitalization since September, driven by an aggressive selloff from foreign investors. The sustained outflow reflects growing concerns about the company’s weaker-than-expected earnings and broader market uncertainties.
Foreign Investors Reverse Course on Samsung
Foreign investors, who had been net buyers of ₩10.76 trillion in Samsung shares during the first seven months of 2024, abruptly reversed their strategy in August. Since then, they have sold a net ₩12.65 trillion, with a staggering ₩10.6 trillion offloaded in just the past month. This marks 23 consecutive days of net selling—the longest streak since a 25-day selloff in 2022.
During this period, Samsung’s share price plunged 20.3%, falling from ₩74,400 to ₩59,300, well beyond the Kospi index’s modest 2.9% decline over the same timeframe.
- Foreign ownership of Samsung shares fell by 2.27%, from 56.02% at the end of August to 53.75% in late September—the steepest monthly drop in two decades.
- The change signals an eroding confidence in Samsung’s growth potential among foreign investors, amplifying concerns in the tech-heavy Kospi market.
Earnings Miss Further Dampens Market Sentiment
Samsung Electronics’ struggles have been exacerbated by disappointing earnings estimates. The company forecasted ₩9.1 trillion in third-quarter operating profit, below the brokerage consensus of ₩10.77 trillion.
Despite projecting record sales of ₩79 trillion, the figure still fell short of market expectations of ₩80.9 trillion, adding to concerns that Samsung’s recovery may be slower than anticipated. The weaker earnings report arrives amid soft global demand for chips and increased competition in the semiconductor sector.
Foreign Buyers Shift Focus to SK hynix
While Samsung Electronics faces turbulence, its domestic rival, SK hynix, has become a favored pick among foreign investors. Since September 3, foreign investors have purchased a net ₩328.76 billion in SK hynix shares, the highest of any stock on the Kospi index.
This divergence highlights shifting market sentiment. Investors appear more optimistic about SK hynix’s near-term prospects, even as the broader semiconductor industry grapples with inventory challenges and sluggish demand.
Market Impact and Outlook
The foreign exodus from Samsung Electronics has not only weighed on the company’s valuation but also raised broader concerns about the outlook for the Korean semiconductor sector. Samsung, which accounts for a significant portion of the Kospi’s market cap, plays a pivotal role in the index’s performance.
However, some analysts believe the selloff could present a buying opportunity if Samsung’s chip business stabilizes and global demand improves. The question remains whether Samsung can quickly rebound, particularly with SK hynix gaining investor confidence.
As market volatility persists, all eyes will be on Samsung’s next earnings report and strategic responses to regain investor trust.