S. Korean stock market sees massive influx of foreign investment

Semiconductor prices rise after Japan’s export controls

The South Korean stock market saw the greatest influx of foreign investment among major emerging markets this month, statistics show. The reason had to do with large net purchasing of Samsung Electronics and SK Hynix shares by foreign buyers as international memory semiconductor prices rose amid measures by Japan abolishing preferential export procedures for South Korea for three semiconductor materials.

According to calculations published by Yuanta Securities on July 22 on foreign purchasing during July for stock markets in 10 emerging economies, a total of US$771 million in South Korean shares were purchased by foreign buyers between July 1 and 19, ranking it first among the 10 countries. South Korea was followed by Thailand (US$641 million), Indonesia (US$241 million), Vietnam (US$76 million), the Philippines (US$66 million), Sri Lanka (US$43 million), and Pakistan (US$15 million). India showed net sales of US$835 million, while Taiwan and Brazil respectively had net sales of US$540 million (through July 12) and US$448 million.

During the first week of July, foreign buyers purchased just US$35 million on the South Korean stock market. But net purchases rose to US$523 million during the second week and US$213 million during the third after Japan announced that it was doing away with its preferential export procedures. By item, net purchasing totaled 895.2 billion won (US$759.46 million) for Samsung Electronics and 269 billion won (US$228.2 million) for SK Hynix, with the combined net purchasing for the two (1.1642 trillion won, or around US$987.57 million) exceeding overall net purchasing.

“South Korea’s export slump continued into July, but foreign investors appear to be betting on a rise in DRAM semiconductor prices,” explained No Dong-gil, an analyst at NH Investment and Securities.

Lee Seung-woo, an analyst at Eugene Investment and Securities, reported, “Last week alone, the price of DRAM (DDR4 8G) rose by 14.6% to finish at US$3.74, which translated into a 12.8% premium over the US$3.31 fixed transaction price for June.”

By Jeong Nam-ku, staff reporter

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