This Year's High
The Financial Supervisory Service announced on Nov. 9 that foreign investors net bought 1,062 billion won of KOSPI stocks and 296 billion won of KOSDAQ stocks last month. The combined purchase volume is this year’s high. This has to do with the won-dollar exchange rate, which dropped last month, and a recovery of the South Korean economy.
They showed net selling for five months in a row until June in the wake of COVID-19. Although their net buying reached 582 billion won in July, their net selling continued again in August and September.
Last month, European investors net bought two trillion won of South Korean stocks whereas American, Asian and Middle Eastern investors net sold 900 billion won, 300 billion won and 200 billion won, respectively. U.K. investors and those in the Cayman Islands net bought 1.3 trillion won and 500 billion won and U.S. and Singaporean investors net sold 800 billion won and 400 billion won, respectively.
At the end of last month, foreign investors’ shareholding was 584.8 trillion won, 30.4 percent of the aggregate value of the South Korean stock market. The amount fell 13.6 trillion won in one month in spite of the net buying because the value of their shares fell. U.S. investors accounted for 41.7 percent of the shareholding, followed by European (30.1 percent), Asian (13 percent) and Middle Eastern (3.6 percent).
In the South Korean bond market, foreign investors’ net buying was 4,089 billion won, 3,881 billion won of bonds were redeemed at maturity and their net investment totaled 208 billion won last month. At the end of last month, they owned 150.7 trillion won of bonds in the market, 7.4 percent of all listed bonds and down 200 billion won from the previous month. A decrease in value more than offset the effect of net buying as in the stock market.
Asian, American and Middle Eastern investors’ net investments were 400 billion won, 400 billion won and 200 billion won, respectively. On the other hand, European investors recorded a net disinvestment of 50 billion won. Asian investors accounted for 47.1 percent of the bonds held by foreigners, followed by European (30.8 percent) and American (8.2 percent).