Foreign selloff in Korean stocks increase and bond holding decrease in September

2020.10.12 15:03:44

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Foreign selloff in Korean stocks accelerated in September while bond holdings fell for the first time this year.

According to the Financial Supervisory Service on Monday, offshore investors in September net sold 2.55 trillion won ($2.22 billion) in Korean stocks – 2.54 trillion won in the main Kospi bourse and 9 billion won in the secondary Kosdaq, sharply higher than 1.07 trillion won net sale in August.

Foreigners kept up net sale streak since February. They briefly turned to net buyers in July.

Asians net sold 4.3 trillion won worth stocks, while Europeans net purchased 900 billion won worth. Americans net bought 500 billion won worth, and Middle Easterners 100 billion won.

Investors from Singapore sold the largest 4.27 trillion won in net, followed by those from Switzerland 344 billion won and Japan 48 billion won. Investors from Luxembourg however purchased 610 billion won in net, the United States 408 billion won, and Germany 258 billion won.

As of the end of September, foreigners held 598.4 trillion won worth of Korean shares, up 9.2 trillion won from a month earlier. Their holdings accounted for 30.3 percent of the total market capitalization, adding 0.3 percentage point from the previous month.

Americans owned the most, worth 249.8 trillion won in Korean shares, accounting for 41.8 percent of foreign ownership. They were followed by Europeans with 179.5 trillion won (30 percent), Asians with 77.9 trillion won (13 percent), and Middle Easterners with 22.5 trillion won (3.8 percent).

In the bond market, offshore investors took profits after avid investment for eight straight months. They purchased 8.36 trillion won worth of bonds, but a bigger share of 8.39 trillion won worth matured.

Foreign ownership in Korean bonds totaled 151 trillion won last month, down 20 billion won from a month ago. Their share within total debt market was 7.5 percent.

Investors from Asia held 70.7 trillion won in Korean bonds, or 46.8 percent of the total foreign ownership. Investors from Europe held 46.8 trillion won worth (31 percent), and Americans 11.9 trillion won (7.9 percent).

They redeemed 1.6 trillion won from holdings in Korean government bonds and 2.3 trillion won from forex stabilization bonds. By maturity, foreigners net invested 3.3 trillion won in bonds dated from one year to less than five years and 1.1 trillion won in bonds dated five years and longer. They redeemed 4.4 trillion won in net from bonds dated less than a year.

By Lee Ha-yeon

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