Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Foreign investors reap 4 times higher returns than retail investors in stock rally
A screen at Woori Bank’s headquarters in Seoul, Oct. 2, shows the benchmark KOSPI closing at 3,549.21, an all-time high based on the closing price. Yonhap
By Lee Yeon-woo
Analysts warn of Q4 volatility, yet bullish on semiconductor plays
Foreign investors have posted returns nearly four times higher than those of retail investors amid a sharp rally in the Korean stock market this year, driven largely by booming semiconductor stocks, analysts said Thursday.
According to data from the Korea Exchange, the 10 most actively purchased stocks by foreign investors from Jan. 1 to Oct. 2 (before the Chuseok holiday) returned an average of 145.6 percent. That's more than triple the 47.9 percent rise of the benchmark KOSPI during the same period.
Samsung Electronics topped the list of foreign net purchases, with 5.6 trillion won ($3.9 billion) worth of shares acquired. Its share surged 67.3 percent year-to-date, climbing from 53,200 won at the end of 2024 to 89,000 won on Oct. 2.
SK hynix was the second-most-purchased stock, with net foreign buying totaling 3.54 trillion won. Its share price also soared 127 percent, climbing from 173,900 won to 395,500 won.
Investor sentiment received a notable boost on Oct. 1, when OpenAI CEO Sam Altman visited Seoul and announced strategic partnerships with both companies.
The optimism extended beyond chips. Hanwha Aerospace, the third-most-purchased stock by foreign investors, delivered a staggering 241 percent return.
Other heavily purchased stocks among foreign investors included Korea Electric Power Corp. (up 77 percent), Hyundai Mobis (up 26 percent), Hyosung Heavy Industries (up 259 percent) and Kakao (up 56 percent).
In contrast, retail investors lagged significantly behind.
The average return of the top 10 stocks most heavily purchased by retail investors during the same period was just 37 percent. This is not only below the KOSPI's overall performance, but also only one-fourth the average return achieved by foreign investors.
Naver led retail buying, with a net purchase of 2.07 trillion won. Its shares climbed 27.2 percent year-to-date, fueled by speculation over a possible merger with Dunamu, operator of Korea’s largest cryptocurrency exchange, Upbit.
Samsung SDI, the second-most purchased stock by retail investors with net buying of approximately 1.8 trillion won, declined 14.8 percent.
Performance among other retail favorites was mixed. Hyundai Motor and Alteogen posted gains of 3.8 percent and 52.3 percent, respectively, while SK Telecom and LG Electronics slipped 1.5 percent and 8.5 percent.
The performance gap underscores the strength of semiconductor-driven large caps, as a global memory chip rebound boosts earnings prospects for Korea's tech giants.
Analysts maintain a bullish outlook on semiconductor-focused strategies heading into year-end, though they warn that rising U.S.–Korea trade tensions could heighten market volatility in the fourth quarter.
"The shortage and rising prices of DRAM (dynamic random access memory) are expected to persist through 2027, and both Samsung Electronics and SK hynix appear to be entering a sustained earnings uptrend," said Kim Dong-won, head of KB Securities Research Center. "Now is an opportune time to increase exposure to semiconductor stocks."