Samsung Electronics' foreign ownership hits 17-year low despite record earnings

Sustained foreign net selling on the domestic stock market has pushed Samsung Electronics' foreign ownership rate down to around 46 percent — its lowest level since the aftermath of the global financial crisis in 2009 — even as the company posted a record quarterly operating profit of 107 trillion won ($79.9 billion).

According to Korea Exchange, foreign investors held 46.38 percent of Samsung Electronics shares as of Thursday. The figure had dipped as low as 46.37 percent on Tuesday, the lowest since Jan. 11, 2008, when it stood at 46.35 percent — a span of roughly 18 years and nine months.

The foreign ownership rate has plunged from about 52.4 percent at the start of this year, when Kospi was on an upward trend. It fell below 50 percent in March after global markets were rattled by the outbreak of the US-Iran war.

The rate slid further to 48 percent in May amid sharp market volatility, and has continued to decline since, falling to the low-46-percent range this month.

SK hynix's foreign ownership rate also stood at 49.59 percent as of Thursday. The chipmaker had maintained a foreign ownership rate above 50 percent continuously since 2023, but has been below that threshold since late last month, remaining in the 49-percent range for eight consecutive trading sessions.

As foreign holdings in both stocks have shrunk, the foreign ownership rate in Kospi's electrical and electronics sector has fallen 2.78 percentage points, from 40.87 percent at the start of the year to 38.09 percent.

Foreign investors have net sold more than 197 trillion won worth of Kospi shares this year. That marks a sharp shift from net purchases of around 11 trillion won in 2023, a near-flat position in 2024, and net selling of around 4 trillion won last year.

Analysts say a reversal in foreign buying is unlikely in the near term. Lee Jae-won, a researcher at Yuanta Securities Korea, said strong earnings alone are not enough to turn the tide. "This has reaffirmed that strong earnings alone are unlikely to reverse foreign investor flows," he said. "Political and geopolitical events do not automatically translate into a return of foreign capital. Rather than trying to predict when foreign investors will come back, the focus should be on watching for early signs of change."