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International investors snap up Samsung shares despite overall selling mode

October 4, 2014

A Taiwanese model perform Samsung Note4 during Samsung's media event in Taipei, Taiwan, Monday, Sept. 30, 2014. The Samsung Galaxy Note4 sells for NT$24,900, US$ 815 in Taiwan.(AP Photo/Chiang Ying-ying)

Samsung shares are still very attractive to international investors. A Taiwanese model holds up a Samsung Note4 during Samsung’s media event in Taipei, Taiwan, Monday, Sept. 30, 2014. (AP Photo/Chiang Ying-ying)

SEOUL (Yonhap) — Foreign investors are snapping up shares of South Korean tech giant Samsung Electronics Co. despite their net selling of local shares for the past three weeks, data showed Sunday.

As of Thursday, foreign ownership of Samsung, the biggest cap in the local bourse, reached 51.84 percent, a three-year high and up more than 2 percentage points from the start of the year, according to the data by the Korea Exchange.

It is the first time since the third quarter of 2011 for Samsung’s foreign ownership to hover above 51 percent.

The rise in foreign ownership of Samsung strikes a sharp contrast with offshore investors’ selling spree here, triggered by concerns over the strength of the U.S. dollar.

Foreigners sold a net 1.43 trillion won (US$1.35 billion) worth of shares in the local market for the past three weeks since Sept. 15, while they were net buyers of Samsung shares worth 446.4 billion won during the period, according to the data.

Market watchers said foreigners seem to be increasing their exposure to Samsung because of its long-term investment value, though its share price has tumbled due to jitters over its third-quarter performance.

Shares of Samsung closed at 1,141,000 won on Thursday, down a whopping 22.4 percent from a yearly high of 1,470,000 won recorded on June 3.

“Although prospects for Samsung’s third-quarter results are not so good, long-term investors appear to believe that Samsung shares have bottomed out,” said Nam Dae-jong, a researcher at Hana Daetoo Securities Co.

According to data released last week by financial information provider FnGuide, Samsung is expected to report 5.49 trillion won in operating income for the third quarter, down 22.5 percent from an estimate of 7.08 trillion won made just four weeks earlier.

Some brokerage houses predicted an operating income of below 4 trillion won for Samsung, citing a waning margin from sales of high-end smartphones and increased competition in mid- and low-end smart devices, according to FnGuide.