Foreigners Turn Net Sellers of Local Stocks in March | Be Korea-savvy

Foreigners Turn Net Sellers of Local Stocks in March

(image: Korea Bizwire)

(image: Korea Bizwire)

SEOUL, April 10 (Korea Bizwire)Foreign investors turned net sellers of South Korean stocks in March amid the collapses of Silicon Valley Bank in the United States and the global bank Credit Suisse, central bank data showed Monday.

Offshore investors sold a net US$1.73 billion worth of local stocks last month, a turnaround from a net purchase of $700 million a month earlier, according to the data from the Bank of Korea (BOK).

The tally represented foreigners’ first net selling of local equities in six months.

A BOK official said foreigners’ net stock selling was driven by stronger risk aversion in the wake of the bank crisis.

Foreigners also bought a net $1.81 billion worth of local bonds, the first net purchase in four months. In February, offshore investors sold a net $520 million worth of local debt.

Foreigners’ net purchase of local stocks and bonds totaled $80 million in March, compared with a net inflow of $180 million a month earlier.

Meanwhile, the premium on credit default swaps (CDS) for South Korea’s five-year dollar-denominated currency stabilization bonds amounted to 43 basis points in March, up from the previous month’s 42 basis points. A basis point is 0.01 percentage point.

The CDS premium reflects the cost of hedging credit risks on corporate or sovereign debt. A rise implies a drop in the credit of sovereign bonds and higher borrowing costs.


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