South Korea has suffered continuous capital outflows of foreign stock funds amid the recent lackluster performance of the domestic market. Thanks to their selling spree, Asia’s fourth-largest economy has seen a further decrease in foreign ownership, data showed Wednesday.
Offshore investors sold a net 31 trillion won ($26.2 billion) of local stocks from January to October, having already surpassed last year’s combined net sales of 24.3 trillion won, according to data from the Financial Supervisory Service. It also inched closer to the largest yearly sell-off of 36.2 trillion won, marked in 2008.
In October alone, foreigners dumped a net 3.34 trillion won of stocks -- with 87 billion won in net purchases on the benchmark Kospi but 3.42 trillion won in net selling from the tech-heavy Kosdaq. Except for April and September when foreigners net purchased shares from the local stock market, they were net sellers in the other eight months this year.
Foreigners’ stock ownership accounted for 27.8 percent of the total market capitalization as of end-October, down 3.6 percentage points from the end of last year. Their stockholdings were valued at around 742.2 trillion won, falling 27 trillion won from a month earlier, the data showed.
Foreign ownership had stayed at around 33 percent earlier this year, but the portion of their stock holdings sharply declined to below 30 percent in June and some 27 percent last month, as the local market continued its suffered from the pandemic.
On the contrary, offshore investors made 2.52 trillion won of net investments in Korean bonds last month, while their net investments in the fixed-income market came to 5.17 trillion won in September. The value of their bond holdings reached 205.1 trillion won as of end-October, up 1.5 trillion won from a month ago.
By Jie Ye-eun (email@example.com