October 30, 2024

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Foreign investors have been increasing their buying of South Korean shares in recent sessions, data showed on April 19, albeit cautious, over the chip industry and progress in US-China trade deals.

According to data compiled by the Korea Exchange (KRX), foreign investors extended their buying binge to eight straight sessions, scooping up shares worth a combined net 1.58 trillion won ($1.38 billion) on April 9. So far this year, the Kospi has advanced 8.45 percent. 

Tech blue chips, among others, were their top picks, including top-cap Samsung Electronics and major chipmaker SK hynix, as they bet their earnings would rebound down the road.

“Starting around the second quarter of this year, the semiconductor market is forecast to make a turnaround, and share prices of major chipmakers are to gather upward momentum,” Choi Do-yeon, an analyst at Shinhan Investment, said.

Offshore investors have been maintaining their buying mode on the local market this year, an about-face from the previous year, when they shed a net 5.7 trillion won worth of shares.

In January, foreigners purchased 4.05 trillion won of shares on the main bourse, the largest amount in nearly four years, on signs of eased trade frictions between Washington and Beijing and hopes for China‘s stimulus measures, according to the data.

In February and March, their net buying reached 140.8 billion won and 301 billion won, respectively.

“Dovish monetary stances from major economies and the optimism on the ending of the US-China trade war appear to whet their appetite for risk, and such a flow could continue for some time,” Lee Young-gon, an analyst from Hana Financial Investment, said.

But lingering concerns over a global economic slowdown and possible trade restrictions by the US, such as tariffs on autos, are forecast to add greater volatility to the market, Lee noted.

By Ram Garikipati and newswires (ram@heraldcorp.com)