Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Foreigners rake in Kakao, NCSOFT amid downturn
By Park Jae-hyuk
By Park Jae-hyuk
Foreign investors spent a lot of money on Kakao and NCSOFT shares in August, while selling other KOSPI- and Kosdaq-listed stocks worth 2.6 trillion won ($2.1 billion), data compiled by the Korea Exchange showed Sunday.
According to the nation's sole securities exchange operator, foreigners' net purchase of Kakao shares reached 137.7 billion won last month.
The operator of the nation's most widely used messenger app KakaoTalk took the top spot among KOSPI-listed firms, in terms of foreigners' monthly net purchases.
NCSOFT ranked third, with their net purchase of the online game maker's shares amounting to 102.5 billion won.
The buying spree helped stock prices of Kakao and NCSOFT jump 5.9 percent and 11.52 percent, respectively, from a month earlier.
Experts attributed the companies' popularity with foreign investors to the great likelihood of improvements in their performances in the second half, saying foreign investors tend to selectively buy shares of companies that are highly expected to show better performances.
According to market analysts, software companies have been less vulnerable to economic fluctuations and global trade feuds than larger caps, such as Samsung Electronics which saw a 1.19 trillion won net selling of its stocks in August.
“Software companies including game makers are less vulnerable to external factors, such as trade wars,” NH Investment & Securities analyst Noh Dong-kil said. “The MSCI rebalancing also had a limited impact on software company shares.”
During the second quarter, Kakao posted a better-than-expected 40.5 billion won operating profit, up 46 percent from a year earlier.
As it is set to begin Kakao Talk Biz Board, a service in which users can purchase goods or reserve things they want with a simple click in Kakao Talk, more investors expect the company will show better earnings in the second half.
NCSOFT has also drawn attention from investors, as it will soon release “Lineage 2M” and “Blade & Soul S.”
The company posted a 129.4 billion won operating profit in the second quarter, down 19 percent from a year earlier, due to it not releasing any new games during the period.
However, market observers expect new games will boost its profits in the second half.
“Investor sentiment on Kakao has improved, because it unveiled efforts for better profitability,” Hana Financial Investment analyst Hwang Seung-taek said in a recent report. “NCSOFT is also expected to see improved investor sentiment, because the opening of a teaser website for Lineage 2M has dispelled worries about any delay in the release of the second-half's most anticipated game.”