Seoul Stock Market Losing Steam
With the South Korean stock market losing steam, South Korean investors’ overseas stock trading volume for this year topped US$14 billion. For reference, their overseas stock trading volume totaled US$12,080.86 million in 2017 as a whole. More and more South Korean stock investors are investing in foreign ETFs as well as companies such as Microsoft, Amazon and Alphabet.
Experts point out that the South Korean economy is likely to remain sluggish for a while and an increasing number of South Korean stock investors will continue to shun their stock market.
According to the Korea Securities Depository, their foreign stock purchase jumped from US$12,080.86 million to US$17,070.36 million from 2017 to 2018. The purchase totaled US$14,106.49 million this month and is expected to top US$20 billion this year.
On the other hand, the average daily trading volume of the KOSPI market dropped from 6.55 trillion won in 2018 to approximately 4 trillion won in July this year.
This has to do with the South Korean stock market’s performance overwhelmed by those of foreign stock markets. Last month, South Korean investors’ top 10 picks in foreign stock markets posted an average return of 6.7 percent while South Korean individual investors’ top net-bought stocks in their stock market recorded an average return of negative 4.5 percent.
The gap widens in different time period settings. For example, foreign stock funds’ average return amounted to 15.5 percent for the first eight months of this year while domestic stock funds posted an average return of negative 16.1 percent during the same period.