Foreign investors, who sold more than 9 trillion won in the Korea Exchange this month, appear to be increasing their equity in preferred shares.
On the 17th, according to the Korea Exchange (KRX), foreign equity ownership in Samsung Electronics preferred shares rose 0.18 percentage point, from 76.84% on the 31st of last month to 77.02% on the 14th of this month.
Foreign equity ownership in Samsung Electronics preferred shares has been steadily increasing from the 73% range at the start of the year. This contrasts with foreign equity ownership in Samsung Electronics (common shares), which fell 0.02 percentage point over the same period, from 52.36% to 52.34%. As a result, as of the 14th of this month, Samsung Electronics preferred shares ranked second in foreign equity ownership among KOSPI-listed issues, up one notch after overtaking KB Financial.
Preferred shares of SK and Amorepacific also saw an increase in the foreign share of total equity. Amorepacific preferred shares rose from 45.06% on the 31st of last month to 45.21% on the 14th of this month, and SK preferred shares increased from 7.72% to 9.31% over the same period.
Since common shares have climbed sharply in the second half while preferred shares have risen more moderately, the inflow of rotational buying appears to have continued. The appeal of dividends from preferred shares has also grown ahead of the year-end payout season.
From the 1st to the 14th of this month, foreigners were net sellers of a total 9.1016 trillion won in the KOSPI market. During this period, their net selling of Samsung Electronics reached 2.0252 trillion won.
Foreigners were also net sellers of 44.1 billion won in Samsung Electronics preferred shares, but excluding the figures for the 14th, when the KOSPI index plunged, they were net buyers by 38.4 billion won (the total from the 1st to the 13th). For SK preferred shares and Amorepacific preferred shares, foreign transactions from the 1st to the 14th showed net purchases of about 1 billion won and 600 million won, respectively.
Shin Chae-rim, a researcher at Korea Investment & Securities, said, "With market volatility expanding, now is a good time to shift attention to dividend stocks that provide cash flow," and noted, "While tracking the market's rebound trajectory, investors should focus on high-dividend index exchange-traded funds (ETFs) with high payout ratios or on corporations commonly held by those ETFs."