SEOUL, Dec. 10 (Korea Bizwire) – Foreign investors have been in a selling binge of local stocks as they reduced risky bets ahead of a looming U.S. rate hike, market watchers said Thursday.
Offshore investors offloaded 243 billion won(US$207 million) worth of shares traded on the main KOSPI market on Wednesday, extending their selling spree to a sixth consecutive day, according to the Korea Exchange (KRX).
Since the beginning of this month, they have sold a total of 1.38 trillion won of local stocks.
Together with the shares listed on the tech-heavy KOSDAQ market, the foreign ownership of local stocks came to 29.33 percent of the total market capitalization as of Wednesday, the KRX said, noting that it has been hovering below the 30 percent level since June of this year.
On Monday, the foreign ownership of the country’s top market cap, Samsung Electronics Co. skidded to 49.98 percent and has since been below the 50-percent level, which is the lowest since April 2014 when the figure came to 50.48 percent.
The selling binge is attributable to big market swings ahead of the potential rate hike in the United States, according to analysts.
“The recent trend is also part of a broader sell-off in emerging stocks before a U.S. rate hike, and it appears to continue until the market accustoms enough to changing circumstances in the possible post-higher rate season,” Samsung Securities researcher Kim Yong-ku said.
According to data compiled by the Financial Supervisory Service, overseas investors were net sellers of South Korean stocks between July and September with a net selling of 8 trillion won, with their net selling marking the highest level in 26 months in August at some 4 trillion won. Last month, they shifted into net buying mode.