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Foreigners’ monthly stock sell-off far exceeds previous record high

(Yonhap)
(Yonhap)

Foreigners sold a net 13.45 trillion won ($11.04 billion) worth of local shares last month, far outpacing the previous record high, data showed Monday.

The March tally beats the previous largest number in August 2007 of 9 trillion won, and is about four times higher than the January figure of 3.23 trillion won, according to the Financial Supervisory Service.

By country, investors from the United States dumped the most at a net 5.5 trillion won, followed by British investors who offloaded a net 1.9 trillion won worth of stocks.

Investors from Luxembourg and the Cayman Islands each sold a net 1.7 trillion won of local stocks.

Meanwhile, Swiss and Saudi Arabian investors net purchased 500 billion won and 200 billion won worth of stocks, respectively, in the same month.

The continued selling spree by foreign investors dragged down the percentage of their ownership in Korean stocks.

As of end-March, local stocks held by foreign investors marked 468.7 trillion won, or 32.4 percent of the country’s market capitalization, down 1.3 percentage points from the previous month.

Their ownership ranged between 33.3 and 33.8 percent from December last year to February this year, but fell as fears of the COVID-19 pandemic escalated.

Of the total, American investors held 197.5 trillion won of local shares, accounting for 42.1 percent. That was followed by those from Britain and Luxemburg with 36 trillion won and 30 trillion won, or 7.7 percent and 6.4 percent, respectively.

Foreign investors tended to prefer low-risk assets such as bonds, rather than higher-risk assets such as stocks. Measures by the financial authorities to help stabilize the local bond market also boosted their sentiment, according to market observers.

Offshore investors’ net buying of local bonds marked 3.58 trillion won last month, extending the buying spree for a third consecutive month.

Investments worth 4.2 trillion won came from Asia, while 800 billion won of net return was generated from the Americas. Offshore investors in the Middle East and Europe also withdrew 100 billion worth of local bonds each in the given month.

As of end-March, foreigners’ bond holdings were valued at a record high of 133.3 trillion won, or 7 percent of the total -- up 4.6 trillion won, or 0.1 percent from a month ago -- the data showed.

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