'COVID-19 Shock'... 3.2 Trillion KRW Net Sell of Domestic Stocks by Foreigners in February

[Asia Economy Reporter Park Ji-hwan] Last month, foreign investors withdrew more than 3.2 trillion KRW from the domestic stock market. This is attributed to a significant decline in investment sentiment due to the spread of the novel coronavirus infection (COVID-19).

According to the 'February 2020 Foreign Securities Investment Trends' released by the Financial Supervisory Service on the 16th, foreigners net sold 3.225 trillion KRW worth of domestic listed stocks last month. They sold 2.97 trillion KRW in the KOSPI market and 260 billion KRW in the KOSDAQ market.

Foreign investment in the domestic stock market turned to net selling just two months after switching to net buying in December last year. Due to the COVID-19 shock, investment sentiment weakened, causing foreign funds to exit both the KOSPI and KOSDAQ markets. Although the number of confirmed COVID-19 cases in Korea remained in single digits for nearly a month after the first case on January 20, it surged from the 19th of last month.

By country, Germany purchased stocks worth 400 billion KRW, Belgium 39 billion KRW, the United Arab Emirates 36 billion KRW, and the United Kingdom 32 billion KRW, all recording net purchases. Conversely, the United States net sold 1.7 trillion KRW, and Luxembourg net sold 400 billion KRW.

As of the end of last month, the total foreign stock holdings amounted to 545.1 trillion KRW, accounting for 33.7% of the total market capitalization. The United States held 231 trillion KRW, representing 42.4% of the total foreign holdings. Next were Europe, including the United Kingdom and Luxembourg, with 161.4 trillion KRW (29.6%), Asia with 68.1 trillion KRW (12.5%), and the Middle East with 18.5 trillion KRW (3.4%).

In bonds, foreign investors continued their buying trend. Last month, foreigners made a net investment of 570 billion KRW after maturity repayments totaling 2.9 trillion KRW. This marked the second consecutive month of net buying following January, with holdings increasing by 30 billion KRW to 128.7 trillion KRW compared to the previous month.

By region, net investments were recorded in the Americas (700 billion KRW), Asia (100 billion KRW), and the Middle East (20 billion KRW). In contrast, Europe saw a net withdrawal of 500 billion KRW.

In terms of holdings, Asia accounted for 54.3 trillion KRW, representing 42.2% of total foreign holdings. Europe and the Americas followed with 45.3 trillion KRW and 11.6 trillion KRW, respectively.

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