Investors dump Samsung, Hyundai Motor amid US tariff risk

A flag of Samsung waves in front of its office building in Seoul in this undated photo. Korea Times file

Foreign investors have engaged in an excessive selling spree of Samsung Electronics and Hyundai Motor this year, as the two companies are considered highly vulnerable to tariff risks from the United States, according to data and analysts on Tuesday.

The investors sold Samsung Electronics shares worth 2.88 trillion won ($2.02 billion) from the beginning of this year to Monday, according to data from the Korea Exchange. Hyundai Motor followed, with foreigners dumping 1.49 trillion won worth of its shares on the benchmark KOSPI during the same period.

The weak stock momentum for the large-cap shares was attributable to heightening trade uncertainties after U.S. President Donald Trump took office in January. He sparked a global trade war by imposing what is widely seen as heavy tariffs on major manufacturing players across the globe.

Other export-reliant Korean firms were also hit by the external trade risk. Foreign investors sold SK hynix shares worth 960.5 billion won this year. This was the fourth-highest, following Samsung Electronics, Hyundai Motor and Hanwha Ocean.

Headquarters of Hyundai Motor and Kia in Seoul / Courtesy of Hyundai Motor Group

Market analysts said that the local stock market and large-cap tech shares remain volatile due to the escalating trade uncertainty abroad.

“The U.S. is forecast to announce additional tariffs on semiconductors and pharmaceutical firms in the near future,” Lim Jung-eun, an analyst at KB Securities, said in a recent report.

Korean stocks are set to see volatile ups and downs as the U.S. intensifies its trade war against China, according to the analyst.

Major local shares ended with a loss on Tuesday on the main bourse. Shares of Samsung Electronics closed at 55,000 on the KOSPI, down 0.72 percent from the previous trading day. Hyundai Motor shares also fell by 0.91 percent during the same period. SK hynix extended a bigger losing streak with a fall of 1.59 percent.