Foreigners cherry-pick Kospi 200 stocks while dumping other Korean stocks

[Photo by MK DB]

Foreign investors’ holdings in sectoral heavyweight stocks on the Kospi 200 Index increased this year when they net sold more than 6 trillion won ($4.62 billion) worth Korean shares due to lingering uncertainties over the economy in a high interest rate environment.

According to the Korea Exchange on Sunday, the total market capitalization of Korean stocks held by offshore investors accounted for 31.06 percent of the main Kospi bourse’s total market value as of Dec. 16, down 2.49 percentage points from 33.55 percent recorded at the end of last year. The drop was mainly attributed to foreign investors’ net sales of Kospi-listed stocks worth 6.35 trillion won.

But they cherry-picked half of Kospi 200 stocks over the same period, making their ownership in 113 heavyweight stocks on the index, nearly half of the total stocks on the index, increase.

Foreign holdings in Hyundai Glovis jumped the most, up 14.66 percentage points to 47.43 percent over the same period. It was mainly due to sales of Hyundai Motor Group’s Honorary Chairman Chung Mong-koo and Chairman Chung Euisun’s combined 10 percent stake in the logistics firm to the Carlyle Group.

Offshore investors picked up shares of Korea Aerospace Industries (KAI), raising their holdings to 25.83 percent from 12.41 percent over the same period. Foreigners were attracted by its rising overseas orders amid the booming defense sector. Its shares soared by 45 percent this year thanks to its large-scale contract with Poland to export FA-50 fighters.

Overseas investors’ holdings in Woori Financial Holdings also rose to 39.99 percent from 29.99 percent, while its share prices rose 1.18 percent over the year partly on anticipation for its high dividend yield ratio of 8.4 percent this year. Foreigners also purchased the financial holding company’s shares offloaded by Korea Deposit Insurance Corp. and Hanwha Life Insurance.

Hyundai Fire & Marine Insurance and Hyundai Mipo Dockyard saw an increase of 10 percentage points in foreigners’ holdings. Hyundai Mipo Dockyard is expected to turn around this year thanks to the shipbuilding boom.