Foreigners remain net sellers of S. Korean assets for 6th month in July
Seoul, Aug 13
Foreign investors remained net sellers of South Korean securities for the sixth consecutive month in July, central bank data showed on Thursday, amid a broader market readjustment.
Offshore investors sold a net US$21.65 billion worth of local stocks and bonds last month, following net sales of 30.72 billion in June, according to data from the Bank of Korea (BOK).
They have remained net sellers since February, reports Yonhap news agency. Foreign investors sold a net $20.7 billion worth of stocks and a net $960 million worth of bonds in July.
The BOK said the sell-off narrowed from a month earlier as the stock market correction discouraged foreigners from rebalancing their portfolios amid resurgent Middle East tensions and lingering concerns over excessive investment in artificial intelligence (AI) infrastructure.
The Korea Composite Stock Price Index (KOSPI) fell more than 20 percent in July alone due mainly to heavy losses in tech shares.
The BOK said reduced foreign portfolio rebalancing also helped the Korean won strengthen against the U.S. dollar during the cited period amid the greenback's recent weakness globally.
The won was trading at 1,424 won per dollar at the end of July, compared with 1,549.4 won a month earlier.
Meanwhile, South Korean stocks extended gains on Thursday morning, led by a rally in big-cap semiconductor shares.
After opening 2.96 percent higher, the benchmark Korea Composite Stock Price Index (KOSPI) rose 275.96 points, or 4.19 percent, to 6,855 as of 11:20 a.m.
Overnight, U.S. stocks tied to the artificial intelligence technology sector rose. The S&P 500 gained 0.26 percent, closing just shy of a record high, while the Nasdaq composite advanced 0.54 percent. In contrast, the Dow Jones Industrial Average edged down 0.04 percent.
In Seoul, blue-chip shares led the advance.
Market bellwether Samsung Electronics rose a sharp 5.48 percent, while its chipmaking rival SK hynix also jumped 7.55 percent.
SK Square, the parent of SK hynix, shot up 8.98 percent, and Samsung Electro-Mechanics, an electronics component affiliate of Samsung Electronics, surged 12.73 percent.
— IANS
Reader Comments
Six months of continuous selling is a lot, but it's good that the KOSPI is bouncing back now. Samsung and SK hynix rallying 5-7% shows the chip sector still has strong fundamentals. Global markets are just jittery with all this Middle East tension.
The article says foreigners sold $21.65 billion but that's actually lower than June's $30.72 billion. So the pace is slowing. The Korean won strengthening to 1424 from 1549 is a big move too. This could be a bottoming signal for Korean assets.
As someone who tracks global markets daily, this AI infrastructure overinvestment concern is real. But South Korea's semiconductor ecosystem is still the backbone of the digital economy. When the AI correction ends, Korea will likely see massive foreign inflows again. Patience is key. 🇮🇳
The KOSPI recovering 4% in one day is impressive. But foreigners selling for six straight months tells you the smart money is still cautious. The won hitting 1424 is good for Korea's import bills though. Interesting to see how this plays out with the Fed's next move.
The Middle East tensions are making all Asian markets volatile. The silver lining is the Korean won stabilizing and tech stocks bouncing back. The global AI selloff seems overdone - companies are still investing heavily in chips and data centers.
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