SEOUL, Mar. 5 (Korea Bizwire) — Chinese investors turned net buyers of South Korean stocks in 2017 as Seoul and Beijing mended fences after a row over an advanced U.S. missile shield, data showed Monday.
Investors from the neighboring country bought a net 388 billion won (US$358 million) worth of South Korean stocks last year, a sharp turnaround from net selling worth 1.6 trillion won in 2016 and 136 billion won the previous year, according to the data from the Financial Supervisory Service.
Chinese investors’ net buying increased sharply after the two countries agreed to normalize bilateral relations strained following the Seoul-Washington agreement in 2016 to deploy a Terminal High Altitude Area Defense (THAAD) battery in southeastern South Korea.
In March last year, Beijing started banning its travel agencies from selling group tours to its citizens in apparent retaliation for the deployment, which began in April. China ended the ban toward the end of last year.
Chinese investors’ net purchases soared to 279 billion won in October from 88 billion won a month earlier, with the amount reaching 260 billion won in January this year.
Helped by strong recent net buying, their ownership of listed South Korean stocks exceeded 12 trillion won as of end-January, compared with 11.7 trillion won at the end of last year.
Despite China’s retaliation against the THAAD deployment, the number of Chinese investors has been on the rise since 2014. The figure stood at 645 as of end-December, up from 579 a year earlier, according to the data.
Market watchers said Chinese investors’ net purchases resulted not only from improved Sino-Korean relations but also the allure of the South Korean stock market, including a stellar rise in the main bourse.