Every stock they bought surged... Foreign investors are set to cement a 40% share of KOSPI market cap

Foreign investors' share of KOSPI market capitalization has surpassed 40%. Even as they have continued to sell in recent sessions, the rise of leading stocks with high foreign ownership, along with the stocks they have been buying, has pushed shares higher on expectations surrounding NVIDIA CEO Jensen Huang's visit to Korea.
According to the Korea Financial Investment Association (KOFIA) on the 2nd, foreign investors' share of KOSPI market capitalization stood at 40.26%, the highest on record. It has remained above 40% for two consecutive trading days since reaching that level on the 29th of last month. Foreign ownership in KOSPI rose to 39.39% on the 11th, surpassing the previous record of 39.26% set on Feb. 14, 2020, and has since stayed at a peak level. Foreign investors' KOSPI market cap also hit a record 2,900.9425 trillion won the previous day. That figure had climbed steadily from 2,531.3511 trillion won on the 21st of last month, jumping by about 400 trillion won in just six trading days. When combined with foreign investors' KOSDAQ market cap of 65.7441 trillion won, foreign holdings in the domestic stock market reached 2,966.6866 trillion won, putting the 3,000 trillion won mark within reach.
Despite an aggressive selling streak, with foreign investors net selling 54.1135 trillion won on KOSPI from last month through the 2nd, the market-cap share rose as large-cap stocks with high foreign ownership rallied. As of the previous day, the stocks with the largest foreign holdings were Samsung Electronics Co., Ltd. at 985.1837 trillion won, SK hynix at 866.3243 trillion won, and Samsung Electronics Co., Ltd. Preferred Shares at 142.8406 trillion won. From last month through the 2nd, those stocks gained 63.49%, 83.51%, and 46.24%, respectively.
Foreign investors' KOSPI market cap and share are expected to keep rising. The stocks they bought heavily have recently posted exceptionally strong gains. From last month through the 2nd, foreign investors net bought 642.1 billion won of Doosan Robotics, 309.6 billion won of Doosan Group, and 228.5 billion won of LG Display. Those stocks have been rising on expectations of expanded cooperation with NVIDIA. Over the same period, Doosan Robotics rose 51.27%, Doosan Group 20.18%, and LG Display 36.13%.
Go Se-eun, a researcher at LS Securities, said, "In general, a rise in foreign ownership is the result of continued net buying, but recently we have seen the so-called 'paradox of ownership,' where ownership rises despite large-scale net selling." She added, "This appears to be the result of follow-on funds flowing into stocks that foreign investors had already positioned in. Foreign investors buy first, and other players later take them over at higher prices."
She also noted, "Compared with the past, foreign investors' flow has become more concentrated in a small number of sectors, showing stronger 'sector selectivity.'" She explained, "This reflects a growing tendency to approach the market at the industry level based on earnings. It has strengthened the link between earnings and stock prices, and individual investors are also following that trend."
However, brokerage analysts say investors should be cautious about stocks that have surged on expectations of Huang's visit. Hwang Soo-wook, a researcher at Meritz Securities, said, "What needs to be confirmed during CEO Huang's visit is how concretely plans for GPU clusters and AI data center expansion in Korea will take shape." He emphasized, "Rather than treating this as a one-off meeting, investors should look at what role Korea will play in NVIDIA's Global AI Infrastructure Expansion Strategy."
yimsh0214@fnnews.com Lim Sang-hyeok Reporter