Uncertain Futures
On Sept. 21, the Korea Composite Stock Price Index (KOSPI) lost 1.57 percent from the previous session and closed at 1,964.68 points.
Foreign investors dumped a quantity of stocks again, while institutional investors veered to accelerate the downturn. Their net-selling amounts reached 197.8 billion won (US$168.3 million) and 105 billion won (US$89.3 million) in that single session, respectively. Individual investors recorded a net purchase of 254 billion won (US$216 million), but the trading volume stood at 3.755 trillion won (US$3.195 billion), the lowest since Feb. 17 this year.
Such a rapid fall is attributable to mounting concerns over the emerging economies, including China, that are eclipsing the sense of relief that followed the recent FOMC decision to freeze the interest rate. “With the interest rate frozen, investors are now focusing on emerging economies, and the Chair of the Board of Governors of the Federal Reserve System Janet Yellen’s recent remarks on those economies have added fuel to the fire,” said Samsung Securities analyst Kim Yong-koo.
“Capital outflow from securities funds investing in emerging countries has already continued for 10 consecutive months,” Mirae Asset research analyst Lee Jae-hoon continued, explaining, “Foreign investors, who rushed out of the domestic stock market last month and came back this month, are looking to turn their backs again.” He added that institutional investors are selling more and more shares these days as well, after a net purchase of over 3 trillion won (US$2.6 billion) since the trough of Aug. 24.