Institutions Unload 3.4 Trillion Won Worth of Assets

[Asia Economy Reporter Koh Hyung-kwang] Institutional investors have been aggressively selling since the beginning of the year. They have been selling every single day this month, unloading a massive 3.4 trillion KRW worth of stocks.

According to the Korea Exchange on the 17th, institutions have continued a net selling streak for 11 consecutive trading days in the KOSPI market from the beginning of this month through the previous day. The total selling volume reached 3.4148 trillion KRW.

This contrasts sharply with last year when institutions were net buyers in the KOSPI market, purchasing 8.8567 trillion KRW over the entire year and 2.763 trillion KRW in December alone. In January 2018, institutions net sold 629.6 billion KRW, and in January last year, they net sold 843.1 billion KRW in the KOSPI market. However, this year, they are unloading volumes incomparable to the past two years.

Since the start of this month, foreigners and individuals have net bought stocks worth 1.701 trillion KRW and 1.6462 trillion KRW respectively, absorbing the institutions' selling pressure. In the KOSDAQ market as well, institutions net sold stocks worth 686 billion KRW.

The selling by institutions is led by financial investment sectors such as securities firms and asset management companies. They accounted for 88% of the institutional selling volume, net selling 3.014 trillion KRW. Investment trusts (201 billion KRW) and pension funds (159.6 billion KRW) also showed net selling dominance.

The sharp increase in institutional selling is analyzed to be influenced by increased arbitrage trading targeting last year's year-end dividend yields. Jeon Gyun, a researcher at Samsung Securities, explained, "Institutional investors net bought KOSPI 200 spot stocks worth 5.6 trillion KRW in November-December last year, but after the year-end ex-dividend date, they recorded net selling of KOSPI 200 spot stocks worth 1.7 trillion KRW," adding, "This appears to reflect the supply-demand flow of liquidating arbitrage positions."

It is assessed that the institutional trend has not abruptly shifted from 'buying' last year to 'selling' this year. Seo Sang-young, a researcher at Kiwoom Securities, said, "In the past, financial investment trading had a high proportion of proprietary capital trading, but now with products like equity-linked securities (ELS) mixed in, exact statistics are unclear," and added, "Most financial investment trading is program trading. Since foreigners have been heavily selling futures and market volatility is high, institutions are showing selling, but it is difficult to say that institutions have fundamentally shifted to a selling stance."

Meanwhile, the stock most sold by institutions this month was Samsung Electronics, with a total of 839.6 billion KRW sold. This was followed by SK Hynix (-153.5 billion KRW), SK Telecom (-151.1 billion KRW), Samsung Electronics Preferred (-114.2 billion KRW), Naver (-101.8 billion KRW), Hyundai Motor (-94 billion KRW), Hyundai Mobis (-90.1 billion KRW), and POSCO (-86 billion KRW).

This content was produced with the assistance of AI translation services.