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Bargain-hunting Korean investors flock to overseas stock markets

Local investors scoop up $12.38b of US stocks in March

(AP-Yonhap)
(AP-Yonhap)

Korean investors are flocking to overseas stock markets to scoop up undervalued shares, given the sluggish domestic market, according to latest data Monday.

Securities information portal SEIBro, operated by Korea Securities Depository, noted local investors transacted some $13.76 billion worth of overseas stocks in March -- up 67.39 percent from the previous month -- marking the largest trading amount in history.

Their transactions came to $7.24 billion, while the selling amount recorded $6.51 billion. Net buying marked about $730 million, up 70.8 percent, from a month earlier, the data showed.

Among the total buying and selling amount, trading in the US market accounted for about 90 percent. Local retail investors traded $12.38 billion worth of shares in the market alone, setting an all-time high.

The buying and selling amount came in at $6.59 billion and $5.8 billion, up 96.21 percent and 97.79 percent from a month ago, respectively. While net purchasing marked nearly $790 million, up 85.37 percent from the previous month.

Major stock indexes on Wall Street tumbled drastically last month as the number of confirmed cases in the country rapidly increased. The Dow Jones Industrial Average plummeted 13.74 percent. The S&P and Nasdaq also plunged 12.51 percent and 10.12 percent, respectively, in the same month.

Local investors rushed to purchase US stocks as the indexes staged a rebound and volatility index also got lowered, market analysts said.

“Due to the big plunge in global stock markets, local investors’ trading values have explosively increased. Their deposit balance turnover ratio also increased up to 900 percent in March,” said Kim Go-eun, an analyst at Meritz Securities.

A market watcher from an investment bank here also noted that some retail investors have a strong belief that now is the time to scoop overseas shares, but warned of market uncertainty.

“It’s hard to predict when global stock markets, including the US, will recover, so investors need to be more cautious when investing in the volatile markets,” he said.

By Jie Ye-eun (yeeun@heraldcorp.com)
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