Foreign ownership of Samsung Electronics hits 2-year low: data

Foreign stock ownership of Samsung Electronics Co., Korea’s biggest market cap, dropped to the lowest level in two years, data showed Tuesday, raising views the market bellwether is losing its charm with overseas investors.

The portion of Samsung Electronics shares held by foreigner investors came to 49 percent on Monday, dropping to the lowest level since 48.96 percent in July 2010, according to the data by the Korea Exchange, the local bourse operator.

The latest ownership by foreign investors marks a sharp fall from a record 60.1 percent logged in April 2004, when the tech heavyweight’s shares were trading at 616,000 won ($537).

Overseas investors have been jacking up their holding of Samsung Electronics shares for the 12th consecutive quarter since the final three months of 2008, when the company’s shares sank to the 430,000 won level amid the global financial crisis.

Buoyed by continued foreign buying, the company’s share price hit a record 1,418,000 won in May this year. On Monday, Samsung Electronics closed at 1,152,000 won.

Foreign investors, however, have recently been cutting back their stakes in the tech giant. The average foreign ownership in the second quarter reached 50.3 percent, down from 51.1 percent in the third quarter of last year.

Should this trend continue, foreigners are expected to hold less than 50 percent of the company in the July-September period this year.

Market watchers external uncertainties are mainly attributed to the fall in foreign stock ownership.

BoA-Merrill Lynch projected the company’s operating profit growth to slow in the second half. A faltering euro as well as weak chip prices will weigh on investor sentiment, it projected.

Concerns over slowing growth in China and the United States prompted the recent sell-off, according to Lim Do-ri, an analyst at Shinyoung Securities Co.

“However, we have to keep in mind that negative factors have largely been factored in. Moreover, although it will take some time to actualize, major economies are announcing stimulus measures,” said Lim.

Samsung Electronics, the crown jewel of top conglomerate Samsung Group, is set to announce its second-quarter earnings later this month. 

(Yonhap News)