[THE INVESTOR] Foreign traders have favored South Korean tech shares recently over auto stocks, , data showed on July 25.

Foreigners scooped up a net 2.96 trillion won (US$2.60 billion) worth of local stocks in the first three weeks of July alone, buttressing the benchmark Korea Composite Stock Price Index, according to the Korea Exchange.


Ditching the traditional pattern of a “balanced” portfolio, they focused buying on tech, steel and materials shares.

They net-purchased 631.6 billion won worth of shares in Samsung Electronics and 240.6 billion of SK hynix in anticipation of improved earnings reports.

Other stocks most chosen by foreign investors include LG Display, Korea Zinc and POSCO.

In contrast, they offloaded a net 160.9 billion won of shares in Hyundai Motor and 86.7 billion won in Kia Motors.

Hyundai, South Korea’s No. 1 carmaker, has suffered a continued drop in profits amid slowing global sales.

“Foreigners have discontinued a traditional basket-style investment to form a portfolio in consideration with market cap ratio,” Samsung Securities said. “They have shown a trend to dump the stocks of firms that are expected to post a fall in revenue and buy those expected to report good earnings.”

(theinvestor@heraldcorp.com)