Foreigners Turn Net Sellers of Korean Stocks in Sept. amid Global Tightening

An electronic signboard in the dealing room of Hana Bank in Seoul on Oct. 11, 2022, shows the benchmark Korea Composite Stock Price Index (KOSPI) having dropped 40.77 points, or 1.83 percent, to close at 2,192.07. South Korean stocks fell sharply as investors sold off tech, auto and other stocks amid concerns that monetary tightening and geopolitical risks could tip the global economy into a recession. (Yonhap)

SEOUL, Oct. 13 (Korea Bizwire) — Foreign investors turned net sellers of South Korean stocks in September on concerns over aggressive monetary tightening in major economies, central bank data showed Thursday.

Foreigners’ stock investment funds logged a net outflow of US$1.65 billion in September, compared with a $3.02 billion net inflow the previous month, according to the data from the Bank of Korea (BOK).

The BOK attributed the reversal to rising concerns over accelerating monetary tightening in major economies, including the United States, which apparently led to an increase in risk aversion among investors.

The won’s sharp depreciation against the dollar appears to have also played a role in forcing foreign investors to leave the Korean market for fear of losses stemming from currency conversion.

The won has weakened around 17 percent against the dollar so far this year.

Foreigners also stayed net sellers of local bonds but the pace of money outflows from the fixed-income market slowed.

Foreigners’ bond investment funds declined $640 million on-month in September, which compared with a $1.31 billion fall reported in August, the data showed.

Their combined investment funds in local securities — stocks and bonds — posted a net outflow of $2.29 billion in September, compared with a net inflow of $1.71 billion a month earlier, according to the data.

(Yonhap)