SEOUL, Aug. 18 (Korea Bizwire) — Foreign ownership of stocks traded on South Korea’s secondary stock market has hit a new high, data showed Friday, as offshore investors turn to undervalued tech firms there after exiting the main bourse.
As of Thursday, offshore investors held 25.98 trillion won (US$22.8 billion) worth of shares traded on the KOSDAQ market for tech and smaller firms, the highest level since the market opened in 1996, according to the data from the Korea Exchange.
Foreign ownership came to nearly 12 percent of the total capitalization of all stocks registered with the tech-laden bourse, marking a nine-year high.
Market watchers said some foreign investors seem to be moving their funds to the secondary market as the main bourse has recently undergone a period of correction amid saber-rattling between the United States and North Korea over the latter’s launches of two intercontinental ballistic missiles in July.
Amid high geopolitical risks, foreigners sold a net 1.37 trillion won on the main market between Aug. 7 and Thursday. Offshore investors bought a net 84.2 billion won on the KOSDAQ market over the cited period with their net buying reaching 122.7 billion won during the past three sessions.
“During the main market’s correction period, foreign investors appear to have turned to relatively undervalued stocks traded on the secondary market,” said Lee Kyung-min, a senior analyst at Daeshin Investment & Securities Co.
The benchmark Korea Composite Stock Price Index (KOSPI) ended higher for the third session running on Thursday after going south several days amid the bitter verbal war between Washington and Pyongyang.