Foreign investors discarded more than owning Korean shares last year, the first shift in their position in three years, and instead bought Korean debt amid growing doubts about the Korean Inc. and underlying economy.

According to data released by Financial Supervisory Service on Monday, foreign investors net sold 6.68 trillion won ($5.97 billion) in Korean stocks last year, snapping two straight years of net buying position. They net purchased Korean stocks worth 12.1 trillion won and 10.2 trillion won in 2016 and 2017, respectively. In 2015, they net sold 3.5 trillion won.

By region, investors from the Great Britain net sold 8.8 trillion won in Korea stocks, from Saudi Arabia 3.1 trillion won and from the Netherlands 2.9 trillion won last year. Investors from the Cayman Islands also offloaded 2.8 trillion won worth Korean stocks, and Luxemburg 1.4 trillion won.

Investors from the United States net purchased 7.3 trillion won worth of Korea stocks last year, those from Hong Kong 1.0 trillion won and China 883.0 billion won. They were followed by Japanese with 769.0 billion won and French 544.0 billion won.

For the month of December alone, offshore investors’ demand for Korean stocks recovered with their net buying reaching 116.0 billion won after a hefty sell-off for the two consecutive months prior to December.

In particular, foreign investors dumped net 4.5 trillion won Korean shares in October alone, causing the country’s main Kospi index to plummet about 14 percent in the month. The tech-heavy secondary Kosdaq market also lost nearly 20 percent, wiping out about 261.4 trillion won in market capitalization in October alone.

As of Dec 31, 2018, foreigners held 509.7 trillion won worth of Korean stocks or 31.3 percent of the total market capitalization. Compared to a year earlier, the volume was down 19.8 percent. Investors from the U.S. held 218.3 trillion won to account for the largest 42.8 percent, followed by those from the U.K with 41.62 trillion won, Luxemburg 31.96 trillion won, Singapore 27.89 trillion won. Those from Japan held 12.48 trillion won and China 10.07 trillion won.

In the Korean bond market, offshore investors net invested 15.6 trillion won in bonds last year, up a whopping 65.4 percent from the previous year. They net purchased 50.9 trillion won worth bonds and collected 35.3 trillion won worth upon maturity in their debt holdings.

By Jin Young-tae and Cho Jeehyun

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