SEOUL, July 1 (Korea Bizwire) – Foreign ownership of South Korean stocks has fallen below the 30-percent level for the first time in nearly four years as market heavyweights preferred by offshore investors underperformed small-caps this year, the nation’s bourse operator said Wednesday.
The value of local stocks held by foreign investors was estimated at 443 trillion won (US$395 billion) as of Monday, accounting for 29.8 percent of the combined capitalization of the main KOSPI and secondary KOSDAQ markets, according to the Korea Exchange (KRX).
Their ownership on the main bourse fell from 34.1 percent at end-2014 to 32.9 percent as of Monday, while the corresponding figure for KOSDAQ slipped from 11.2 percent to 10.2 percent, the KRX said.
The fall in their weight came as the tech-heavy KOSDAQ outshone KOSPI and offshore investors turned to net sellers in early June on the looming Greece debt crisis.
The benchmark index KOSPI has risen 8.3 percent this year, lagging behind the KOSDAQ market’s 36.7 percent gain.
Within the KOSPI market, a large-cap index gained 3.1 percent, while a small-cap index vaulted 32.7 percent, the KRX said.
Foreigners, who had been net buyers through May, dumped 1.49 trillion won of stocks traded on the main bourse last month.
“Foreign ownership decreased as market heavyweights preferred by foreign investors have been tepid in the first half of this year, while mid- and small-caps in the cosmetics and bio sectors rallied,” Cho Byung-hyun, a researcher at Yuanta Securities Korea, said.