Retail investors dump Samsung Electronics shares

A trader points at an electronic board inside a dealing room at Hana Bank, Seoul, Friday. Yonhap

By Lee Kyung-min

Retail investors are offloading Samsung Electronics shares, frustrated by the continued price downtrend over the past year and signs of a further decline despite record-high profits achieved in the third quarter.

The collective impatience is further compounded by an uncertain growth outlook of Samsung Electronics' foundry business, after U.S. rival Intel announced a $20 billion (23 trillion won) investment in two new chip-making facilities in March.

Apple, Amazon, Qualcomm and Microsoft were among the key Samsung Electronics clients contacted by the U.S. firm for a change in business partnerships.

“Samsung Electronics' operating profit is expected to fall through the second quarter of next year, but a further plunge in price is not likely given a low valuation and high dividend payout,” a report by Eugene Investment said.

Data from the Korea Exchange showed that retail investors net-sold 259.4 billion won worth of Samsung Electronics shares over 10 consecutive trading days from Nov. 1 to 12.

The share price rose sharply for about two months until it peaked at 96,800 won on Jan. 11, but has declined since then. It fell further to 70,600 won on Nov. 12, down 12.84 percent from 81,000 won at the end of last year and 27 percent below the Jan. 11 high. Retail investors who purchased Samsung Electronics shares this year are suffering losses, as calculated by the net-purchased amount divided by the net-purchased number of shares.

Retail investors will be net sellers of the shares in November for the first time since November 2020 when they net sold over 1.1 trillion won worth of shares. Retail investors net-purchased 35.1 trillion won worth of Samsung shares this year, on the back of the soaring popularity of equity market investments enabled by cheap liquidity pumped in to weather the COVID-19 pandemic.

The number of retail investors who own Samsung Electronics shares surpassed 4.5 million as of June, more than doubling from 2.1 million six months earlier.

Most of them bought into the firm following a rosy market outlook forecasting robust demand for semiconductors continue for years, in what some market watchers termed a “super-cycle.” FnGuide, a financial information provider, said Samsung Electronics shares as projected by 21 local brokerages average 95,870 won, as of Nov. 12.