[Noon Salon] Why Foreign Investors Are Selling and Why Hasty Decisions Should Be Avoided
CEO Park Shin-woo cited foreign investors' sales of more than KRW 230 trillion in domestic stocks since the start of the year as a reason for the selling. Investors who bought at low prices in the past can still realize gains even after recent share price declines, meaning they face little pressure to sell, he explained. He added that even if foreign investors continue to invest in AI, they may not view semiconductors as their top sector and could shift funds to other areas of AI.
Given the large weight of Samsung Electronics and SK hynix in the KOSPI, the broader Korean market may remain weak while foreign investors sell the two stocks. The analysis is that foreign investors may hesitate to buy other Korean stocks as they sell semiconductors, while existing investors' purchase price levels create selling overhang that could cap an index rebound. However, he said foreign buying could resume once profit-taking runs its course, preference for memory stocks returns and domestic market flows improve.
Park Shin-woo said investors should first decide whether to reduce their holdings now that the market has fallen, or instead increase them during a recovery. His position was that investors should examine the evidence more closely rather than offer vague hopes, and, above all, avoid acting rashly without having reached a conclusion. He said shareholder returns such as treasury share cancellations and dividends, restored confidence in Samsung Electronics and SK hynix earnings, and an overall improvement in market flows could prompt foreign investors to return.