The Korea Exchange announced on March 21 that foreign investors recorded a net purchase of 3.1783 trillion won in the South Korean stock market between March 2 and 18. They had recorded a net sale of 2.9662 trillion won in the market in the first month of this year but posted a net buy of 300.5 billion won in the following month and then the net purchase amount skyrocketed this month. Between the beginning of this year and March 18, the amount totaled 512.6 billion won.
This year, they bought chemical stocks worth 653.7 billion won, steel and metal stocks worth 497.6 billion won and transport equipment stocks worth 451.6 billion won. By company, they recorded a purchase of 497 billion won in Korea Aerospace Industries, 258.5 billion won in LG Household & Health Care and 255 billion won in POSCO.
In the meantime, they sold shares worth 1.0347 trillion won in the electrical and electronics sector, 620.8 billion won in financial and 229.2 billion won in pharmaceutical.
The large net purchase can be attributed to foreign investors’ preference for risky assets that has been ignited by the Federal Open Market Committee’s implication to stimulate the economy while curbing a rise in interest rate for the rest of this year. In addition, foreign funds are flowing into the South Korean stock market these days with expectations for an economic recovery on the rise and the currencies of emerging economies appreciating.