Foreign Investors, Institutions Offload Samsung Electronics, SK Hynix 8.7 Trillion Won Each in One Week; Stocks Drop 8.8%, 9.3%

According to Korea Exchange data, foreign investors and institutional investors conducted massive selloffs of Samsung Electronics and SK Hynix during the week ending July 3. Samsung Electronics fell 8.84% to 309,500 Korean won, while SK Hynix declined 9.28% to 2,425,000 won. Foreign investors dumped 8.7362 trillion won worth of SK Hynix and 8.7325 trillion won of Samsung Electronics in net sales. Institutions also sold 515.8 billion won of SK Hynix, though they purchased 1.7408 trillion won of Samsung Electronics.

Analysts attributed the moves to portfolio rebalancing. As semiconductor stock prices surged sharply from the second half of last year, large fund managers needed to reduce their chipmaker holdings to stay within predetermined allocation limits. Lee Kyung-soo, a researcher at Hana Securities, noted that foreign investors and pension funds may temporarily increase semiconductor stock selling around the Q2 earnings announcements as they adjust their Korean equity weightings for global asset allocation purposes.