Celltrion, Hanwha Aerospace and Hanmi Semiconductor are top picks; Samsung Electronics sees 2 trillion won sell-off in profit-taking

An electronic board shows the benchmark Kospi and secondary Kosdaq at Hana Bank’s dealing room in central Seoul, Friday. (Yonhap)
An electronic board shows the benchmark Kospi and secondary Kosdaq at Hana Bank’s dealing room in central Seoul, Friday. (Yonhap)

Foreign investors have been betting big on South Korea's benchmark Kospi this year, scooping up roughly 2 trillion won ($1.5 billion) worth of shares so far.

Offshore investors net bought shares worth 1.74 trillion won on the Kospi from Jan. 2 to Friday, according to data from the Korea Exchange, the country's bourse operator. During the period, retail investors and institutional investors offloaded 249 billion won and 2.16 trillion won on the bourse, respectively.

Foreign investors had earlier driven the local stock market lower, dumping more than 14 trillion won worth of Kospi-listed shares in November last year. The sell-off marked the largest monthly net foreign outflow on record, pulling the Kospi down by more than 4 percent.

The investors, however, shifted to a net-buying stance in December, injecting 3.55 trillion won into the market. The offshore inflow helped the Kospi reclaim the 4,000-point level.

The rally has gathered further momentum this year, with the benchmark jumping nearly 9 percent in just six trading sessions through Friday.

This year, Celltrion was the top foreign pick, attracting net inflows of 404 billion won, followed by Hanwha Aerospace at 353 billion won and Hanmi Semiconductor at 317 billion won.

Samsung Electronics, however, saw the heaviest selling, with foreign investors offloading 2.05 trillion won worth of shares, largely attributed to profit-taking. The sell-off marks a contrast from the previous month’s net buying of 2.19 trillion won.

Foreigners' net buying of SK hynix was limited to 208 billion won this year, marking a sharp drop from the net buying of 2.19 trillion won in December.

Market analysts project the continued foreign buying rally is likely to accelerate the Kospi’s push toward the 5,000-point milestone.

"Strong and fast earnings improvements, alongside a trend of rising 12-month forward earnings per share, are increasing the likelihood that the Kospi will reach 5,000 points in the first quarter of this year," Lee Kyung-min, a researcher at Daishin Securities, said.

“If the earnings momentum is supported by a stabilizing currency valuation and a gradual appreciation of the won, the combined impact of currency effects and foreign inflows should further reinforce the market’s upward trend,” Lee said.


silverstar@heraldcorp.com