Foreign investors are confident that Samsung will recover next year from the economic impact left behind by COVID-19. Anticipating growth across various segments – especially in the semiconductor market – foreign investors have been on a Samsung share buying spree for the past week. This has driven the company's shares to a historic high and has increased share prices to a level similar to where they were before the COVID-19 pandemic.
Global investment firms JP Morgan has acquired 3.41 million Samsung shares in the last week, whereas Merril Lynch has secured 2.22 million shares within the same time window, reveals The Korea Economic Daily. The publication claims that other individual investors have sold off shares for a net worth of 2.9 trillion won ($2.6 million).
Today, November 13, foreign investors have secured a net 578.5 billion won ($518 million) worth of shares, and Samsung's share price stood at 63,200 won ($57), the highest it's been since the COVID-19 outbreak began.
Investors are betting big on Samsung's 2021 recovery
The share price increase was driven by foreign investors who anticipate businesses to recover next year. In particular, investors expect Samsung's semiconductor business to perform very well in 2021 thanks to an increase in demand for DRAM chips. Samsung was the world's largest DRAM supplier for the smartphone market in the first half of 2020. It was followed by SK Hynix.
Aside from a healthy semiconductor business, investors are looking at other external factors that will likely continue to drive Samsung's share price up, such as exchange rates and interest rates, and the capital inflow into emerging markets. Joe Biden's administration could also lead to a decrease in USD value compared to emerging market currencies, resulting in foreign investors continuing to buy off Samsung shares.
