Net Selling Amounts to around KRW70tn As of June 17
The Korea Exchange announced on June 19 that foreign investors’ net selling in the South Korean stock market amounted to 68.9006 trillion won from January 2020 to June 17 this year. Specifically, the amounts for 2020, 2021 and this year are more than 24.81 trillion won, more than 25.79 trillion won and more than 18.29 trillion won, respectively. In that period, South Korean individual investors’ net buying was approximately 168 trillion won.
According to market experts, foreign investors are unlikely to increase their investment in the South Korean stock market for the time being with U.S. interest rate hikes continuing. The Fed is likely to take another giant step next month and the U.S. interest rate at the end of this year is estimated at 3.25 percent to 3.5 percent. South Korea’s current rate is 1.75 percent and the U.S. rate is about to exceed it, which means more money will flow into the United States.
The Bank of Korea is predicted to raise its key rate by 0.25 percentage point each in July, August, October and November. It is also said that one of the four adjustments will be 0.5 percentage point.
Still, foreign investors are unlikely to return to the South Korean market this year and KOSPI, which dipped below 2,400 points on June 17, is likely to fall further. “This year’s trough is estimated at 2,300 points, 30 percent lower than last year’s peak,” said the Korea Capital Market Institute.