Foreign net buying of South Korean stocks hits 9-year high

Foreign investors bought listed South Korean stocks worth a net 6.14 trillion won ($4.8 billion) in January, according to the Financial Supervisory Service on Monday.

This is the highest net buying amount that South Korea has seen in nine years, since September 2013, when the total was recorded at 8.32 trillion won. It is also the first time since November 2020 that net purchases surpassed 6 trillion won.

Most of the investments centered on the Kospi market.

Foreign investors’ net buying of Kospi stocks marked 6.28 trillion won in January, while in the secondary Kosdaq market, net selling of stocks reached 238 billion won.

The foreign net buying trend started in October last year. Some local experts said this was due to US stock market fluctuations, which led many investors to look for profits at companies in other emerging markets.

In October and November, the total net buying hit 3.57 trillion won and 2.92 trillion won respectively.

In December, foreign investors’ net purchase amount shrank to 403 billion won, but bounced back in January.

It also brings the total amount of Korean stocks that foreigners hold to 636 trillion won as of January, increasing 62.2 trillion won from the previous month. This accounts for 26.9 percent of the domestic market capitalization.

When looking into data that classifies investors by their nationality, American investors spent the most money in Korea with their net purchase amount at 1.62 trillion won in January, followed by investors from Luxembourg (1.59 trillion) and the UK (948 billion won).

Investors from the Netherlands showed the highest net selling amount in January of 150 billion won. Canada was next on the list with its investors’ net selling reaching 131 billion won.

Meanwhile, in the local bond market,  foreign investors showed a selling trend, as their net return from listed bonds in January reached 6.56 trillion won.

In January, bonds worth 3.53 trillion won were net sold by foreign investors, while 3.03 trillion won of bonds matured.

As of the end of January, foreigners’ remaining bond holdings added up to 222 trillion won, representing 9.4 percent of total listed bonds.