"Samsung and SK hynix are being sold now": Retail investors turn to net selling semiconductor stocks after five months

[Financial News] Retail investors who had been buying Samsung Electronics and SK hynix shifted to net selling this month for the first time in five months. With foreign investors also selling, the supply-demand burden on semiconductor stocks is growing.
According to the Korea Exchange (KRX) on the 13th, retail investors had net sold 5.212 trillion won worth of Samsung Electronics and 7.818 trillion won worth of SK hynix, respectively, through the 11th of this month.
From May through last month, retail investors were net buyers of Samsung Electronics and SK hynix for four consecutive months. This month, however, selling has outweighed buying in both stocks.

There were also developments that raised expectations for the semiconductor industry when investors shifted to selling. After OpenAI unveiled its new artificial intelligence (AI) model, Astra, late last week, expectations grew for increased demand for high-capacity products. Despite continued expectations of an improvement in the memory-chip market, retail investors sold semiconductor stocks heavily.

The slowdown in the KOSPI Composite Index's advance is also believed to have influenced retail investors' shift to selling. As the momentum of the domestic stock market weakened after the third quarter, investor sentiment deteriorated. Investment demand for semiconductor stocks also appears to have declined following financial authorities' regulations on single-stock leveraged exchange-traded funds (ETFs).

The decline in the won-dollar exchange rate to the mid-1,300-won range also appears to have played a role by reducing the burden of investing in U.S. technology stocks.
According to the Korea Securities Depository (KSD), retail investors had net bought $73.26 million (986 million won) worth of Alphabet, $65.22 million (877 million won) worth of Broadcom, and $54.09 million (728 million won) worth of Meta Platforms this month. All three stocks ranked among the top 10 overseas stocks by net purchases from retail investors this month.
Foreign investors are also continuing to sell semiconductor stocks. Since May, they have recorded net selling in both Samsung Electronics and SK hynix for five consecutive months.
Through the 11th of this month, foreign investors had net sold 1.96 trillion won worth of each of Samsung Electronics and SK hynix.
Other corporations, however, supported the lower end of the share prices by buying both stocks. Other corporations have recently become major market participants, partly because of share buybacks by Samsung Electronics and SK hynix. This month, they had net bought 4.658 trillion won worth of Samsung Electronics and 9.89 trillion won worth of SK hynix.
Experts say semiconductor stocks remain attractive investments because semiconductor companies' earnings momentum could continue amid surging AI demand.

Some analysts, however, have warned that a decline in the won-dollar exchange rate could weigh on semiconductor companies' earnings. If the won continues to strengthen, the amount of overseas revenue earned in dollars would decrease when converted into won.
There is also a view that if semiconductor earnings momentum weakens, stock-market funds could shift to other sectors that have so far been overlooked.

[email protected] Han Seung-gon Reporter