Foreign holdings in South Korean stocks hit the highest in 13 years as of August despite their selling spree amid the lackluster local market.

According to Korea Exchange on Wednesday, offshore investors as of Tuesday held 501.67 trillion won ($414.95 billion) in Korean shares, accounting for 38.35 percent of the total market capitalization.

Foreign ownership in Korea-listed stocks hovered around 35 percent in the beginning of this year and topped 37 percent in March and 38 percent in July. It then reached 38.68 percent on Aug. 5, the highest since August 2006.

This trend gained attention at a time when foreigners are dumping Korean shares on growing concerns about the export-reliant Korean economy amid worsening trade tensions between the U.S. and China and a deepening trade row between Seoul and Tokyo. In August alone, offshore investors net sold 2 trillion won worth stocks on the Korean bourses.

Some market participants said the high foreign ownership indicates that foreigners are upping their holdings in market heavyweights on expectation for a recovery in the Korean stock market.

But their holding ratio would not indicate upside signs for the market as it could suggest great subdued activities from local players.

Samsung Securities explained the increasing foreign ownership in Korean stocks came mainly in line with a rise in inflow of passive capital to equities markets of emerging countries that was triggered by the U.S. central bank’s signal to halt tightening early this year.

SK Securities also said it is only the result of a plunge in stocks held by domestic investors, sharper than those owned by offshore investors.

By Chung Seung-hwan and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]