Samsung Electronics shares rise by foreign investors’ massive buying

Samsung Electronics shares have risen over 9% for the last four trading days, raising the likelihood of a rebound to the 60,000-won mark. The uptrend appears to have resulted from the tech company’s improved performance, escalating tensions between the U.S. and China, and Intel’s plan to outsource chip manufacturing, all of which led to a massive buying by foreign investors.

The stock price of KOSPI market bellwether Samsung Electronics closed at 59,000 won on Wednesday, up 0.68% from the previous day. The price rose over 2% in at one point, exceeding 60,000 won for the first time in five months since Feb. 20. Samsung Electronics shares soared 5.4% the previous day, raising expectations for a recovery to the 60,000-won mark and to hit a record high of 62,800 won.

A soar in the tech giant’s stock prices was led by foreign investors’ massive buying. Foreign investors net purchased 289.4 billion won worth of Samsung Electronics shares on Wednesday, following 920.8 billion won on Tuesday. Overseas buyers have net purchased 2.6501 trillion won worth of Samsung Electronics shares this month. Considering that foreign investors’ total net purchase of POSCO shares, which is their second-most favorite, only amounted to 302 billion won during the same period, most of the foreign investment was focused on Samsung Electronics.

Market watchers viewed that favorable opportunities at home and abroad have worked to the advantage of the tech giant. In particular, the tech giant’s chip and home appliance divisions delivered a sound performance amid the COVID-19 pandemic, signaling a better-than-expected second quarter results. Intel’s outsourcing announcement has also raised expectations for improved performance as Samsung Electronics could benefit from the outsourcing plan along with TSMC, the global No. 1 foundry company.

Samsung shares rallied also on expectations that Washington’s anti-Huawei campaign could provide opportunity for Samsung. The campaign will help the South Korean tech giant gain the upper hand in dominating the global 5G smartphone market. Investors are turning their eyes to emerging markets due to surges in global liquidity and a weak U.S. dollar, which is working favorably for the KOSPI market bellwether Samsung Electronics. Experts think that foreign investors are making more investments in South Korea since the country is less hit by the COVID-19 pandemic.

Some analysts say Samsung shares are likely to remain bullish for the time being since its prices were slow to bounce back. “A weak U.S. dollar is creating a favorable environment for foreign investors and positive signs for the demand of smartphones and chips are emerging in overseas markets,” said Choi Seok-won, head of the research center at SK Securities.


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