Korean steelmaking giant POSCO was the most popular stock this year for foreign investors, market data showed Monday, amid improving sentiments helped by its better-than-expected earnings.

According to financial data provider FnGuide, foreign investors bought a net 475.8 billion won ($407.3 million) worth of POSCO stocks on the Seoul bourse during the January-May period.

This was the largest portion of foreign net buying, which came to about 3.39 trillion won in the period.

Shares in the steelmaker had surged 23.78 percent to 203,000 won as of June 2, from 164,000 won on Jan. 4.

Strong demand for the steelmaker came as POSCO posted better-than-expected earnings in the first quarter, which sparked major brokerages to raise their forecasts for the share price.

On a consolidated basis, POSCO saw its first-quarter operating profit jump 93.7 percent from the previous quarter. Its operating profit also rose by 2.9 percentage points on-quarter to 5.3 percent.

“The company is expected to show improvement in its earnings in the second quarter, following the big jump in quarter-to-quarter operating income during the January to March period,” said Lee Hyun-soo, an analyst at Yuanta Securities Korea.

He expected the steelmaker would post second quarter consolidated operating income of 788 billion won, up 19 percent from 659.8 billion won in the first quarter.

Lee attributed the expected surge to the rise in carbon steel’s average sale price and key raw material costs that maintained at their existing level.

Stocks listed on the main board KOSPI, tech-ridden KOSDAQ and market for start-ups and small and medium-sized enterprises KONEX were subjected to the ranking data.

Korea Aerospace Industries had the second most popular stock, with a net 452.4 billion won worth of shares bought by foreigners.

Third-ranked in terms of net foreign buying was cosmetics-maker AmorePacific, followed by LG Household & Health Care, Samsung SDI and Korea Electric Power Corp., the data showed.

Foreign investors started to scoop up local stocks in mid-February, as the KOSPI bounced back after a slide in earlier months.

During the five month period, Samsung Electronics ranked as the most sold-off individual stock, as foreigners sold a net 814 billion won in shares.

They also ditched stocks of Samsung Life Insurance and Hotel Shilla, selling 543.8 billion won and 419 billion won worth of stocks.

BY Park Han-na (hnpark@heraldcorp.com)