Samsung Electronics’ stock closed at 72,500 won on Sept. 3, down 2.6% from the previous day, leading to complaints from the company’s 4.24 million small shareholders. The price was only 1,100 won higher than the closing price on Aug. 5, the day of a historic market crash.
According to the Korea Exchange, foreign and institutional investors sold a net 4.256 trillion won and 1.207 trillion won worth of Samsung shares, respectively, driving the price down. Pension funds, including the National Pension Service, have been selling Samsung shares for 10 consecutive days. Despite retail investors buying over 5.3 trillion won worth of the stock, it was insufficient to halt the decline.
Samsung Electronics’ stock closed at 71,400 won on Aug. 5, down 10% during the market crash. Retail investors who boldly bought 13.5 trillion won worth, believing in the adage to “buy stocks in times of fear,” are now deeply disappointed with the stagnant price.
One individual investor said, “While TSMC dropped only 0.84% that day, Samsung fell more than 2%. It seems there are no reliable stocks to invest in South Korea.” Another investor expressed concern that uncertainties in the domestic market, such as the introduction of the financial investment income tax, might be prompting foreign investors to withdraw their investments.
Samsung stock has fallen 10.5% since the August crash, based on the opening price on Sept. 2 and the closing price on Sept. 3, making it the worst performer in returns among the top 100 global companies by market capitalization. Foreign investors sold 2.4 trillion won worth during this period, contributing to the decline. Among the top 100 global firms, Eli Lilly, a U.S. pharmaceutical company known for its obesity treatments, saw the highest stock price increase at 20%.
Samsung Electronics reported a strong performance for the second quarter of this year, with operating profit exceeding 10 trillion won, marking an earnings surprise. However, the stock price has struggled to gain traction. Small shareholders are lamenting that the stock price is not reflecting the company’s strong performance. According to NH Investment & Securities, 55% of the 637,000 customers holding Samsung shares are currently experiencing unrealized losses. The average return was 1.6% at the end of August, but it is likely worse now due to the further decline in the stock price this month.
“The impact of artificial intelligence-related products is expected to become evident from 2025, but concerns about slowing demand for PCs and mobile devices are pressuring the stock,” said Ko Young-min, a researcher at Daol Investment & Securities. “The stock price will stabilize once uncertainties about future performance, such as high-bandwidth memory (HBM), are resolved.”
Foreign investors who sold Samsung Electronics on Sept. 3 heavily bought shares in Samsung C&T, with net purchases totaling 21.4 billion won. Samsung C&T closed at 154,800 won, up 6% from the previous day, following positive evaluations of its renewable energy business. The trading volume for Samsung C&T exceeded 600,000 shares, driven by both foreign and institutional investors. Foreign investors also net bought shares in LG Energy Solution (20.9 billion won), LS Electric (16.5 billion won), Amorepacific (15.9 billion won), and Shinhan Financial Group (12.8 billion won).
This article was originally published on Sept. 3, 2024.
