It has been found that foreign investors have continued their buying spree in the Korean stock market for three consecutive months, in spite of concerns over the Fed’s exit strategy from quantitative easing. This can be attributed to the fact that the country’s economic fundamentals are regarded as more robust than those of many other emerging economies.
According to the Financial Supervisory Service, foreign investors bought listed stocks worth a total of 8.3 trillion won (US$7.7 billion) in the market in September. In July and August, the net purchase amount was 1.348 trillion won (US$1.255 billion) and 1.524 trillion won (US$1.419 billion), respectively.
As of the end of September, foreign stock holdings in Korea amounted to 417.4 trillion won (US$388.5 billion), increased by 20.1 trillion won (US$18.7 billion) from a month earlier. The ratio of their holdings to total market capitalization went up from 31.4% to 31.9% between August and last month, too. By country, American investors net purchased 2 trillion won (US$1.86 billion), putting them at the top of the list. They were followed by British (1.4 trillion won, US$1.30 billion) and Singaporean (1.2 trillion won, US$1.12 billion) investors.
American investors accounted for 39%, or 163 trillion won (US$151.7 billion), of the total stock holdings by foreigners. British (38.1 trillion won, US$35.5 billion) and Luxembourgian (26.4 trillion won, US$24.6 billion) investors followed them. “It seems that they highly appreciate the robust economic fundamentals of Korea,” said the agency.
In the meantime, foreigners recorded net sales of 2.4 trillion won (US$2.2 billion) in the Korean bond market. This is because of the maturity of monetary stabilization bonds and government bonds. They net purchased 100 billion won (US$93 million) worth of bonds here, excluding the redemption portion. American investors also net sold 900 billion won (US$838 million) worth of bonds, followed by their British (600 billion won, US$558.5 million) and French (500 billion won, US$465.3 million) counterparts.