Institutional investors are buttressing the Korean stock market these days with large buying orders.
According to the Korea Exchange, foreign investors recorded a net selling of 1,888.3 billion won, excluding exchange traded funds (ETFs), in January this month whereas institutional investors net bought 950 billion won worth of shares during the same period. Between the last 11 days of the month, the former net sold 1,746.3 billion won worth of shares while the latter recorded a net purchase of 1,366.6 billion won. In short, institutional investors took what foreign investors sold.
Recently, the Korea Composite Stock Price Index (KOSPI) has declined as foreign investors have sold shares but their institutional counterparts are keeping the index from falling further by means of a flood of buying orders.
“Vanguard’s benchmark changes have resulted in 80 billion won or so of sell orders per day on the part of foreigners but institutional investors, including the pension fund, are increasing their purchase as of late,” said Daishin Securities research analyst Kim Young-il, adding, “The current trend is likely to continue unless foreign funds exceeding Vanguard’s selling flow in.”