Samsung-SK hynix 'Bottom Signal' Turns On... Foreign Investors Switch Spot and Futures Positions

[Financial News] Foreign investors are aggressively selling spot shares of Samsung Electronics and SK hynix, while taking the opposite approach in the futures market. The moves are interpreted as a strategy to prepare for a rebound in semiconductor stocks even as investors take profits.
According to the Korea Exchange (KRX) on the 20th, foreign investors had net sold 9.9492 trillion won worth of Samsung Electronics and SK hynix spot shares from the beginning of this month through the 18th. Strong selling has continued after net sales of 7.2189 trillion won last month.
By contrast, their futures positions shifted to buying. Foreign investors net bought 2.3456 trillion won worth of Samsung Electronics and SK hynix futures this month. They had net sold 2.3817 trillion won in futures last month, reversing course within a month.
Futures are contracts to buy or sell a specific asset at a predetermined price on a set date in the future. Although investors do not actually buy or sell the shares, strong futures buying can be interpreted as a bet on future stock-price gains.
Short selling, which is mainly used by foreign investors and institutions, is showing a similar pattern. As of the 16th, the net short-selling balance for Samsung Electronics and SK hynix stood at 1.8553 trillion won, down by 1.0868 trillion won this month alone.
Short selling involves borrowing shares and selling them, then buying them back at a lower price if the stock falls and returning them to the lender. A decline in the outstanding balance is generally interpreted as indicating that more investors expect stock prices to rise from their current levels.
Analysts say the moves should be viewed as a sign that Samsung Electronics and SK hynix shares have entered a phase of forming a bottom. Foreign investors appear to be reducing their spot exposure to semiconductor stocks while keeping a potential rebound in mind.
An industry source said, "The strategy appears to involve selling spot shares to reduce volatility and rebalance portfolios, while using futures to prepare for a rebound in stock prices. As the spot sales have generated cash, investors are expected to actively buy shares when the uptrend gains momentum."
The source added, "Selling spot shares and buying futures is a strategy often used when stock prices are near a low. Although it cannot simply be described as a bet on further gains, the prevailing view appears to be that stock prices are unlikely to fall much further."
Positive views of the semiconductor industry are also being maintained. Although concerns about a slowdown in the pace of AI development have recently emerged, analysts say they have yet to materialize and that solid demand continues.
Lee Jae-won, a researcher at Yuanta Securities Korea, said, "Nebius Group's (NBIS) higher graphics processing unit (GPU) rental fees, Arm's confidence in demand for data-center central processing units (CPUs), Advanced Micro Devices' (AMD) higher AI accelerator prices, and Amazon.com's long-term contracts for data-center generators all confirm that demand for AI computing and infrastructure remains solid." He forecast, "Although the Federal Open Market Committee (FOMC) left open the possibility of additional rate hikes, it did not signal consecutive monetary tightening through next year. As a result, the market's focus is likely to shift back to earnings and orders."
[email protected] Seo Min-ji Reporter