Korean retail investors pile into Samsung Electronics, margin trading hits record high

SEOUL, January 11 (AJP) — South Korean retail investors are piling into Samsung Electronics, snapping up shares sold by foreign investors amid bullish expectations for a memory-chip upcycle driven by rapid adoption of artificial intelligence infrastructure, pushing leveraged trading to record levels.

According to the Korea Exchange, individual investors net bought 2.915 trillion won ($2.0 billion) worth of Samsung Electronics shares last week, the largest weekly net purchase since the second week of September 2024. 

The buying spree coincided with profit-taking by foreign investors, who net sold 10.57 million common shares, equivalent to about 1.5 trillion won, at an average price of 138,000 won per share during the same period. 

Retail investors also rotated out of rival chipmaker SK hynix, net selling 167 billion won worth of its shares. The shift reflects growing preference for Samsung Electronics, whose earnings outlook has improved alongside broad-based strength in DRAM prices, while SK hynix remains more heavily exposed to high-bandwidth memory supplies for Nvidia.

As retail demand surged, leveraged stock investment climbed to an all-time high.

The outstanding margin loan balance for Samsung Electronics reached 1.977 trillion won as of Friday, the highest level on record, according to exchange data. The balance represents shares purchased with borrowed funds that have yet to be repaid, with increases signaling rising debt-funded investing. 

Samsung Electronics’ margin debt has increased for seven consecutive trading sessions, from Dec. 29 through Jan. 8. 

The surge in leveraged buying has been driven by expectations of stronger memory-chip demand tied to expanding AI investment, as well as renewed investor interest following the company’s fourth-quarter earnings announcement on Jan. 8. 

Samsung Electronics reported preliminary fourth-quarter operating profit of 20 trillion won, up 208.2 percent from a year earlier, marking its best-ever quarterly performance. On the day of the earnings release, individual investors net bought 985 billion won worth of the stock. 

Brokerages expect the uptrend in memory-chip prices to continue and see scope for earnings momentum to extend into this year, prompting a series of target price upgrades. 

According to financial data provider FnGuide, the average target price from at least three brokerages stood at 154,423 won as of Friday, up 17,654 won from the previous consensus. KB Securities raised its target price to 200,000 won.