On June 12, as the KOSPI closed above the 2,920 mark after rising for seven consecutive trading sessions, market indices are displayed on screens inside the Hana Bank dealing room in Jung-gu, Seoul. (Yonhap)
SEOUL, June 16 (Korea Bizwire) — Global investors are showing renewed confidence in South Korea’s stock market, with over ₩1 trillion (US$770 million) pouring into the iShares MSCI Korea ETF (ticker: EWY) this month alone—the highest monthly inflow in 18 months.
The U.S.-listed exchange-traded fund, which offers global investors passive exposure to Korea’s leading equities, has become a barometer of international sentiment toward the Korean market. According to Bloomberg and Daol Investment & Securities, the EWY ETF saw net inflows of $772.85 million from June 1 to 10, the largest since January 2023.
This sharp influx of capital is helping lift large-cap stocks such as Samsung Electronics and SK hynix, which make up 20.8% and 10.94% of the fund’s portfolio, respectively. The fund also includes major names like KB Financial, Hanwha Aerospace, Naver, Hyundai Motor, and Celltrion.
Fueling the momentum are hopes tied to the new administration’s push for shareholder-friendly reforms, including amendments to the Commercial Act, as well as expectations of a mid-year fiscal stimulus and potential interest rate cuts by the Bank of Korea. The result: a 12.85% surge in EWY’s share price between May 29 and June 12, outperforming gains in comparable emerging market ETFs such as iShares MSCI Emerging Markets (3.79%) and iShares MSCI Taiwan (6.53%).
The ETF’s outstanding shares have also reversed course after months of decline, rising from 51,450 in April to 61,200 as of June 10.
Foreign investors have been aggressively buying Korean stocks throughout June, purchasing ₩4.46 trillion in KOSPI-listed shares over just eight trading sessions. Notably, even amid heightened geopolitical uncertainty following Israel’s airstrike on Iran, foreign buyers remained net purchasers, picking up ₩121 billion in KOSPI shares on June 13 alone.
Much of this foreign buying has concentrated in Korea’s key semiconductor names. In June so far, foreign investors have net-bought ₩858.5 billion in Samsung Electronics and ₩1.17 trillion in SK hynix, helping lift their stock prices by 3.74% and 15.16%, respectively.
“The recent KOSPI rally is largely being driven by passive foreign capital,” said Kim Ji-hyun, a research analyst at Daol Investment & Securities. “And the foreign buying trend is unlikely to reverse in the near term.”
Analysts also point to South Korea’s relatively low foreign ownership rate as a reason for continued inflows. “Foreign holdings in KOSPI remain below the 10-year average of 33.3%, currently at 31.4%,” said Kang Jin-hyuk of Shinhan Securities. “That leaves room for more buying.”
Beyond short-term optimism, there is growing belief that Korea is undergoing a valuation rerating. With expectations for higher return-on-equity (ROE) and relief from the long-standing “Korea discount,” foreign investors appear to be positioning for a more structurally favorable environment in the Korean capital market.
Ashley Song (ashley@koreabizwire.com)
