Korean institutions offload $1.56 bn worth of shares to realize profit

Institutional investors in South Korea have made significant net selling moves in the stock market this month, totaling over 2 trillion won ($1.56 billion won), as they sought to capitalize on profits.

According to the Korea Exchange, foreign investors and individual investors net purchased 147.9 billion won and 148.7 billion won worth of stocks in the main Kospi market on Thursday.

On the other hand, institutional investors net sold 316.6 billion won worth of shares, pulling down the Kospi by 0.31 percent to 2,600.23 upon closing. It was the fourth straight trading day of net selling by institutional investors.

Over a span of just 14 trading days of this month alone, institutions have offloaded stocks worth a substantial 2.29 trillion won, showing a significant increase of 76.21 percent compared to their net selling amount in the second quarter, which stood at 1.3 trillion won.

This contrasts with the actions of foreign and individual investors during the same period, as they net-purchased 1.88 trillion won and 383.4 billion won, respectively.

The net selling by institutions is primarily attributed to profit-taking from relatively strong market rallies.

“Institutions have been consistently focusing on large-cap stocks in the electrical and electronic, chemical, and transportation equipment industries,” said Choi Yoo-joon, an analyst at Shinhan Investment Corp. “This strategic approach is influencing the overall market sentiment and contributing to its recent weakness.”

The top 10 most-sold stocks by institutions this month were Samsung Electronics (208.2 billion won), L&F (198.7 billion won), SK innovation (138.2 billion won), Celltrion (117.6 billion won), EcoPro BM (10.3 billion won), Kia (97.2 billion won), F&F (89 billion won), GS E&C (86.9 billion won), Hyundai Motor (77.1 billion won), and LG Energy Solutions (68.8 billion won).

Despite the prevailing trend of mass net selling, institutions have shown interest in stocks that are anticipated to rebound in the second half of the year.

The top ten stocks that institutions have been acquiring the most this month include Naver (248.2 billion won), Korean Air (107 billion won), SK hynix (74.6 billion won), Hyundai Mobis (60.5 billion won), Samsung Electro-Mechanics (59.6 billion won), S-Oil (55.4 billion won), Leeno Industrial (50.2 billion won), Hanwha Solutions (39.6 billion won), SM Entertainment (39.1 billion won), and STI (36.9 billion won).

Among these, Hyundai Mobis and Samsung Electro-Mechanics stand out, with institutions expecting improved performances in the automotive and semiconductor industries during the latter half of this year.

Remarkably, Hyundai Mobis made its first appearance in the top ten stocks that institutions have been net buying this year. The company recently disclosed its overseas orders target for the automotive display and other fields, setting it at about 2.39 trillion won.

Additionally, with the semiconductor sector expected to undergo a solid recovery in the second half of the year, institutions have intensified their net buying activity in semiconductor-related stocks on the Kosdaq market.

Companies like Leeno Industrial and STI garnered increased attention from institutional investors, both making their debut in the top ten stocks with net buying by institutions this year.