Investor Behavior Diverges in South Korean Stock Market

The Korea Exchange recently reported a notable divergence in investment behavior between individual and foreign investors in the South Korean stock market throughout October. Individual investors heavily favored Samsung Electronics, purchasing shares worth 4.2761 trillion won (approximately $3.09 billion), while foreign investors showed a strong preference for SK Hynix, buying shares worth 745 billion won.

The month began with Samsung Electronics' stock price at 61,300 won and SK Hynix at 169,100 won on October 2. However, by October 28, Samsung Electronics' stock had plummeted over 9% to an intraday low of 55,700 won, whereas SK Hynix's stock surged by 15.90% to 196,000 won. This stark contrast in stock performance reflects the differing investor sentiments and market dynamics at play.

During the first six trading days of October, individual investors concentrated their buying efforts on Samsung Electronics, with net purchases amounting to 2.1573 trillion won. This trend continued throughout the month, culminating in a total of 4.2761 trillion won spent on Samsung Electronics shares by October 31. In comparison, the amount spent on Samsung Electronics shares was 11 times larger than the 371.6 billion won worth of Hyundai Motor shares purchased by individuals.

Foreign investors, on the other hand, were more inclined towards SK Hynix, driven by the company's superior performance in the semiconductor sector. SK Hynix's stock price increase can be attributed to its strong third-quarter earnings and positive future outlook. Lee Kyung-min, a researcher at Daishin Securities, noted, "SK Hynix's earnings for the third quarter saw upward revisions of 2.2% and 4.5% for 2024 and 2025, respectively, while most other stocks, including Samsung Electronics, saw no changes."

Samsung Electronics reported an operating profit of 3.86 trillion won in the semiconductor sector for the third quarter, falling short of the anticipated 4 trillion won. This underperformance led to a continued sell-off of Samsung Electronics shares by foreign investors throughout October. In contrast, SK Hynix's strong performance and dominance in the High Bandwidth Memory (HBM) market have bolstered investor confidence. Kim Kwang-jin, a researcher at Hanwha Investment & Securities, predicted, "SK Hynix will continue to highlight its dominance in the HBM market during periods of demand slowdown."