Samsung and SK Hynix's soaring stock prices trigger fund's forced sell-off, facing a net outflow of $58.6 billion from foreign investors this year

BlockBeats News, May 29th, according to Bloomberg, Samsung Electronics and SK Hynix saw a significant increase in their stock prices, leading some funds to be forced to reduce their holdings due to reaching the single stock holding limit. Affected by the 10% single stock holding limit, institutions such as GAM Investment Management and Jupiter Asset Management have begun to adjust their portfolios to meet diversification requirements. Over the past year, SK Hynix has accumulated a gain of over 1000%, Samsung Electronics has seen an increase of over 400%, and both companies have surpassed a $1 trillion market capitalization.

Data shows that as of Thursday, global investors have net sold $63.6 billion worth of South Korean stocks this year, with a net outflow of $58.6 billion for Samsung Electronics and SK Hynix combined. Goldman Sachs estimates that since last October, holdings-related restrictions have triggered approximately $69 billion in sales. Some institutions are starting to turn to alternative targets to gain semiconductor exposure. For example, SK Square, which holds a 20.5% stake in SK Hynix, and Samsung Life Insurance, which holds an 8.58% stake in Samsung Electronics, have seen a substantial increase in their stock prices over the past year.

Goldman Sachs stated that if the weight of Samsung Electronics and SK Hynix in the South Korean stock market continues to rise, they may still face additional selling pressure in the future, but most of the passive unwinding is either completed or close to completion.