"We Cashed Out and Left"... In a Month of War, Foreign Investors Dumped 35 Trillion Won in South Korean Stocks

[Financial News] After war broke out between the United States and Iran, foreign investors turned net sellers of more than 35 trillion won in South Korean stocks. This appears to reflect a growing desire to avoid war-related risks by offloading South Korean shares, which are vulnerable to higher oil prices. In particular, they heavily sold semiconductor stocks that had surged earlier in the year.
According to the Korea Exchange (KRX) on the 4th, foreign investors sold a net 35.1611 trillion won worth of shares from March 3 to April 3. Over the same period, domestic retail investors were net buyers of 37.4417 trillion won, a stark contrast.
Samsung Electronics was the stock most heavily sold by foreigners in the month after the war began. Foreign investors recorded net selling of 18.4075 trillion won in Samsung Electronics alone. Roughly half of their total net selling came from this single stock.
In terms of trading volume, they sold 100 million shares of Samsung Electronics (99.49 million shares). Since the war, they have offloaded about 292.31 million shares, while buying only 192.81 million.
Including the 15.56 million shares they sold net on March 3, the first trading day after the war, selling pressure dominated on every session except three. Effectively, the selling spree continued almost without a break for an entire month.
Due to this large-scale foreign exodus, the foreign ownership ratio of Samsung Electronics has fallen to its lowest level in 13 years. As of April 3, foreigners held 48.40% of Samsung Electronics, the lowest since September 11, 2013 (48.35%), or about 12 years and 7 months ago.

The next most heavily sold stock after Samsung Electronics was SK hynix. Foreign investors sold 8.2766 trillion won worth of SK hynix over the month, equivalent to 9.12 million shares. They also dumped 2.8508 trillion won, or 5.42 million shares, of Hyundai Motor.
Analysts say the rapid rise in uncertainty after the war prompted foreign investors to cut their exposure to high-risk emerging-market equities and move into safer assets. There was a particularly strong push to lock in profits on Samsung Electronics and SK hynix, whose share prices had climbed quickly from the start of the year, stoking concerns about overvaluation.
Another factor cited is that, compared with other emerging markets, South Korea offers high liquidity and makes it relatively easy for investors to sell shares and convert them into cash.
fair@fnnews.com Han Young-joon Reporter