Foreign Fund Outflow Likely to Slow Down
The Korea Exchange announced on July 18 that foreign investors’ ratio in KOSPI was 31.18 percent that day. “The ratio has decreased from 33.5 percent since the beginning of this year and the current figure is the lowest since the global financial crisis of 2009,” it said.
The ratio of foreign investment to the KOSDAQ market cap reached as low as 8.74 percent on July 18. It dipped below 9 percent late last month and has never exceeded 9 percent since then.
“This is because of the interest rate hike by the Fed, exchange rate fluctuations, domestic stock prices, the U.S. dollar index, risk preference, volatility indicators, etc.,” said the Korea Capital Market Institute.
According to experts, the foreign fund outflow is likely to slow down with time, although stable exchange rates are a prerequisite to any increase in foreign investment in the stock market.