Foreign Investment in South Korean Listed Firms Surges Nearly 30% in a Year

Foreign investment in major South Korean listed companies has surged, with the number of investment cases increasing by nearly 30% over the past year. As of the end of May, foreign companies and funds held stakes of 5% or more in 123 listed companies among the top 500 by market capitalization, a significant rise from 95 cases during the same period last year.

The cosmetics sector experienced the most substantial growth in foreign investment, jumping from just two cases to nine. This surge is attributed to the growing global appeal of Korean beauty products (K-beauty), boosting performance expectations for related companies. Notably, companies like Cosmax, an original equipment manufacturer (OEM) and original design manufacturer (ODM), attracted significant capital from global investors, including Singapore's sovereign wealth fund and Norway's central bank, in addition to existing investors like Fidelity International.

Other sectors also saw increased foreign interest. The semiconductor and pharmaceutical/biotech industries each recorded an increase of four investment cases compared to the previous year. In the semiconductor industry, foreign investment diversified beyond large-cap stocks like SK Hynix to include mid- and small-cap component and equipment manufacturers such as Meeco, Eugene Technology, and Comico. The pharmaceutical and biotech sector expanded its foreign investment base from one company to five.

Geographically, U.S. investors accounted for the largest share, with 69 cases, representing over 56% of the total. European investors followed with 25 cases, then Japanese investors with 10, and Chinese investors with 8. BlackRock, a U.S. investment firm, significantly expanded its portfolio, adding 12 new domestic companies to its holdings, bringing its total to 19 major stakes. European capital primarily came from sovereign wealth funds and asset management companies. Japanese investors often focused on joint ventures in technology and security, while Chinese investment centered on game and entertainment companies, with Tencent being a prominent investor.