Sell Korea
The ratio of foreign investors’ shareholding to the aggregate market value of KOSPI reached 30.83 percent on June 17, the lowest since Aug. 18, 2009. The ratio to the number of issued shares hit this year’s low of 18.01 percent on May 23 and reached 18.2 percent on June 17.
They are continuing to dispose of their KOSPI stocks. Specifically, their net selling from June 1 to 20 and from Jan. 1 to June 20 amounts to 4.2277 trillion won and 13.474 trillion won, respectively. This has to do with U.S. interest hikes, the won-dollar exchange rate, concerns over stagflation, etc. The rate has jumped from 1,191.8 won to 1,292.4 won per U.S. dollar since the beginning of this year.
As for the interest hikes, the Fed recently took a giant step to 1.5 to 1.75 percent and 0.5 percentage point is likely to be added next month. The Bank of Korea’s current key rate is 1.75 percent, and it is about to be exceeded by that of the Fed. In other words, the value of the South Korean currency is likely to keep falling.
Foreign investors are reducing their investment in the South Korean stock market for the war in Ukraine and shutdowns of Chinese cities as well. According to experts, their KOSPI shareholding is likely to fall further with such uncertainties showing no signs of disappearing.