Kospi lifted in Jan by foreign investors’ massive buying spree

2019.02.07 13:26:27 | 2019.02.07 15:53:17

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South Korea’s main stock Kospi market in January was buoyed by the buying spree of foreign investors who net bought 4.5 trillion won ($4 billion) worth Korean stocks, their largest monthly net purchase in 45 months since April 2015.

According to the nation’s sole stock exchange operator Korea Exchange (KRX) on Sunday, offshore investors’ net buying of local shares on the Kospi bourse in January reached a 45-month high of 4.5 trillion won, while retail and institutional investors net sold a respective of 3.23 trillion won and 843.1 billion won worth local stocks.

The strong appetite for Korean equities from foreign players boosted the Kospi by 8.03 percent last month alone, allowing the main index to recoup most loss made in October when it was heavily battered. The main Kospi closed Monday unchanged from the previous session at 2,203.42, and the secondary Kosdaq finished 1.66 percent higher at 728.79.

Overseas investors stocked up 2.33 trillion won in Samsung Electronics’ shares and 822.4 billion won in SK Hynix, the world’s two largest chip makers, accounting for about 78 percent of their total net purchase in local equities. They also net bought 192.7 billion won worth shares in Korea Electric Power Corp. (KEPCO), 123.8 billion won in Samsung SDI, 107.2 billion won in LG Chem and 103.2 billion won in SK.

By sector, 3.45 trillion won or 85.2 percent of the foreign buying was made in electronic, components and chip-related stocks, followed by finance shares worth 487.3 billion won, chemicals 268.2 billion won and construction 218.9 billion won.

Foreign players snatched up local stocks that had dropped 30 to 40 percent in the final quarter of last year from their highs due to growing concerns over weak company earnings.

Amid signs of easing trade tensions between the U.S. and China and slowing rate hike movement by the U.S. Federal Reserve, market watchers expect the Seoul markets would remain calm for the time being.

Market analysts expect that investors will wait for cues from the upcoming U.S. and North Korea summit to be held in Feb. 27-28 in Vietnam and U.S.-China summit this month. They also expect that stocks related to North Korea would continue to draw investment from around the world.

By Jung Hee-young and Choi Mira

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