US 'blue tsunami' batters semiconductor stocks

Foreign ownership of Samsung Electronics, SK hynix hits multi-year lows

The Kospi breaches the 5,000 mark at the opening bell on Friday, triggering a panic sell-off. The index plunged more than 8 percent in early trading on the back of a collapse in US semiconductor stocks, prompting a circuit breaker to be activated. [Yoon Chang-bin]
The Kospi breaches the 5,000 mark at the opening bell on Friday, triggering a panic sell-off. The index plunged more than 8 percent in early trading on the back of a collapse in US semiconductor stocks, prompting a circuit breaker to be activated. [Yoon Chang-bin]

Foreign investors sold more than 7.6 trillion won ($5.66 billion) worth of Samsung Electronics and SK hynix shares in a single week as the fallout from a "blue tsunami" in the US midterm elections swept through South Korea's stock market.

Analysts say the sell-off in semiconductor-related stocks was driven by growing concerns that the election outcome could lead to tighter regulation of AI data centers.

As share prices at both companies fell, foreign ownership rates dropped to their lowest levels in roughly 17 years and five years, respectively.

According to Korea Exchange and Koscom Check data released Sunday, foreign investors net sold approximately 10.4 trillion won worth of Kospi-listed shares over the five trading sessions from Monday through Friday.

SK hynix was the most heavily sold stock, with net selling reaching 5.4 trillion won. Samsung Electronics followed with 2.2 trillion won in net selling.

The surge in foreign selling pushed down the foreign ownership rate for both stocks.

Korea Exchange data show that Samsung Electronics' foreign ownership rate stood at 45.95 percent as of Friday — the lowest since July 7, 2009, when it hit 45.83 percent amid a contraction in investor sentiment following the global financial crisis, a gap of roughly 17 years and four months.

SK hynix's foreign ownership rate also slid to 48.27 percent, its lowest level in about five years since Nov. 22, 2021, when it stood at 47.97 percent.

Samsung Electronics closed at 188,700 won on Friday, down 36,300 won, or 16.13 percent, from 225,000 won at the close of the previous week on Oct. 30.

SK hynix fell 286,000 won, or 20.17 percent, over the same period, dropping from 1.418 million won to 1.132 million won.

Market analysts view the large-scale foreign selling as the primary driver of the Kospi's sharp recent decline.

Yuanta Securities Korea said "the biggest burden was foreign investor supply and demand," adding that concerns over panic selling and forced liquidation by foreign investors amplified the downward trend.


shindw@heraldcorp.com