Foreigners' Net Selling Reaches 32 Trillion Won This Year

Concerns Over Semiconductor Peak-Out and Early-Year Surge in Domestic Stock Market
"Switch to Buying Upon Confirmation of Dollar Weakness and Semiconductor Bottom"

[Asia Economy Reporter Ji Yeon-jin] It has been revealed that foreign investors have sold nearly 33 trillion won worth of domestic stocks this year. At the end of last month, the proportion of foreigners in the domestic stock market's market capitalization fell to 27.8%, the lowest level since June 2009, right after the global financial crisis.

According to the Korea Exchange on the 10th, the net selling volume of foreigners in the domestic stock market reached 32.763 trillion won up to the previous day this year. This far exceeds last year's net selling amount by foreigners of 24.379 trillion won. Foreigners net sold 31.2965 trillion won in the KOSPI market and 8.924 billion won in the KOSDAQ market this year.

According to the status of foreign securities investment in October announced by the Financial Supervisory Service on the same day, foreigners net sold 3.422 trillion won in the KOSPI market last month and net bought 87 billion won in the KOSDAQ, recording a net selling of 3.335 trillion won. Except for May and September this year, foreigners have been continuously net sellers. The foreign ownership ratio exceeded 30% at the end of last year but fell to 27.8% at the end of last month due to the continued selling trend this year. This is the lowest level since June 2009 (27.3%).

This month, foreigners net bought 277.4 billion won, but they net sold 262.3 billion won in the KOSPI. In the KOSDAQ market, they purchased stocks worth 536.8 billion won. Kim Hak-jun, a researcher at Kiwoom Securities, said, "The increasing proportion of new industries with highlighted growth potential, mainly in the bio and IT sectors, can be seen as a factor that enhances the attractiveness and stability of the KOSDAQ market from an investor's perspective."

The decline in foreigners' share of domestic stocks has been a continuing trend since China emerged in emerging markets. Additionally, the domestic stock market surged the most worldwide from the second half of last year to early this year, leading foreign investors to reduce their domestic stock holdings this year, according to the financial investment industry. Concerns over a peak-out in semiconductors, which have a large weight in the KOSPI, also fueled the selling trend. Lee Jin-woo, a researcher at Meritz Securities, said, "The weakening view of foreigners on semiconductors and the adjustment of global stock proportions acted in combination. Although the strong dollar reduced foreign inflows into emerging markets, the shift to a weaker dollar and the perception that semiconductors have bottomed out may lead to meaningful buying by foreigners."

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