Institutional and foreign investors net sold 4.7 trillion won ($4 billion) worth shares in the South Korea’s secondary Kosdaq market from the beginning of the year to November 11, the largest sell-off in history, according to data released by Korea Exchange on Tuesday.

The massive selling spree has been led by institutional investors over the past four years. They have kept their net selling momentum since 2011, with their net selling of Kosdaq shares reaching peak at 4.47 trillion won in 2016.

Over the past week, institutional investors net sold 216.2 billion won worth Kosdaq shares and foreigners 207.2 billion won, according to the data.

Retail investors, on the other hand, net purchased 6.68 trillion won worth stocks on Kosdaq from January to November 11. Retail investors snatched up 5.75 trillion won on the junior market even in 2016 as opposed to the selling spree by institutional investors.

Market experts believe that the massive outflow of institutional investors and foreigners has been the biggest reason for the feeble performance of the Korean stock markets. “Lack of information of Kosdaq-listed firms has been driving out institutional and offshore investors as they tend to make investments based on data,” said Kim Hyung-ryul, head of research center at Kyobo Securities. Analysts pointed out that the poor performance was also driven by the strengthening dollar over the past few years and weak businesses of bio companies commanding a large share on Kosdaq.

According to SK Securities, the country’s main Kospi market yielded 6.2 percent of return on average from 2016 to October this year, while Kosdaq recorded a loss of 3.5 percent. It was only four times that the monthly rate of returns on Kosdaq exceeded that on Kospi from January to October this year.

By Ahn Gap-sung and Choi Mira

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