(Bloomberg) — Concerns of slowing growth have driven an exodus of foreign funds from South Korean equities, cutting overseas ownership of the nation’s largest stock Samsung Electronics Co. to a six-year low.
Foreign holdings of Samsung, the world’s largest memory chipmaker, fell last week to the lowest level since April 2016, according to exchange data and Bloomberg calculations.
It’s dropped below 50% from over 58% in July 2019.
Investors have been selling growth shares amid concerns that higher interest rates in the US and elsewhere will strangle the global economy.
The selloff has made South Korea, with its high proportion of technology companies, one the worst-performing stock markets this year.
Foreign funds have offloaded a net $11.9 billion of stocks in South Korea’s benchmark Kospi this year, including $6.4 billion worth of Samsung.
That’s helped drive Samsung’s stock down about 25% in 2022 while the Kospi has fallen 19%.
Samsung’s home appliance and visual display divisions “will inevitably see lower earnings on global inflation and the war in Ukraine,” Kim Young-Woo, an analyst at SK Securities Co., wrote in a note this week.
Smaller rival SK Hynix Inc.
has recorded a net foreign inflow of $406 million due to its perception as a “pure” memory stock. Samsung is more diversified, with mobile phone and other businesses that are expected to suffer from an economic downturn even as robust demand supports chip prices.
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