Foreign ownership of the total capitalization of all stocks registered on South Korea’s stock market has increased for three years in a row. In particular, the net purchases of stocks on the tech-heavy secondary KOSDAQ market by foreign investors have more than tripled compared to the previous year. More than half of them were stocks of financial sector.
According to the Korea Exchange (KRX) on January 15, offshore investors bought a net 9.71 trillion won (US$9.11 billion) worth of local stocks in 2017, accounting for 33.16 percent of the total market capitalization. The amount of their net purchases dropped 21.42 percent on-year but their share in the market capitalization rose 1.77 percent points over the same period.
Foreign ownership of the total capitalization of local stocks has on the increase for the third consecutive year. The share of foreign investors on the KOSPI market stood at 37.19 percent as of the end of last year, up 1.99 percent points from a year earlier, while that on the KOSDAQ market came to 13.25 percent, up 3.19 percent points. The share of foreign investors on the KOSPI and KOSDAQ increased 4.88 percent points and 4.32 percent points, respectively, compared to 2015.
By market, foreigners net purchased 6.58 trillion won (US$6.18 billion) on the KOSPI market and 3.13 trillion won (US$2.94 billion) on the KOSDAQ market. The figures went down 41.94 percent and up 206.48 percent, respectively, from a year ago.
By sector, the net purchases of financial stocks by foreign investors amounted to 5.16 trillion won (US$4.85 billion), taking up the most of the total, followed by service and chemical stocks. On the other hand, foreigners net sold 7.53 trillion won (US$7.06 billion) worth of electric and electronic stocks, selling the most, followed by manufacturing and construction stocks.
By company, offshore investors net purchased the most of KB Financial on the KOSPI market, followed by LG Electronics and LG Chem, while they net purchased the most of Celltrion on the KOSDAQ market, followed by SillaJen and CJ E&M.
Foreigners net sold 6.13 trillion won (US$5.76 billion) worth of Samsung Electronics on the KOSPI and 142.3 billion won (US$133.55 million) worth of TissueGene on the KODSDAQ market.
An official from the KRX said, “The KOSDAQ market showed the strongest foreign buying ever last year. The expansion of investment in pension funds and deregulation are expected to help maintain the current buying trend in the future.”