Foreign Investors Sell Over 20 Trillion Won This Year... 'Sell Korea' Continues

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] It has been revealed that foreign investors' selling pressure in the domestic stock market has increased this year. Foreigners have continued their selling stance by net selling over 20 trillion won in the domestic stock market. As the global tightening movement intensifies, foreign capital outflow from the domestic stock market appears to be accelerating.

According to the Korea Exchange on the 17th, as of the 15th, foreigners net sold 20.858 trillion won in the domestic securities market, including the KOSPI, KOSDAQ, futures and options, exchange-traded funds (ETF), exchange-traded notes (ETN), and equity-linked warrants (ELW) this year. Over the past three months, foreigners sold stocks worth a total of 11.6818 trillion won in the KOSPI and KOSDAQ markets, with 9.2198 trillion won and 2.462 trillion won respectively.

Foreign investors mainly focused on selling large-cap stocks by market capitalization. In the KOSPI, foreigners sold more than 3 trillion won each of LG Energy Solution, the second largest by market cap, and the 'blue-chip' Samsung Electronics. Representative growth stocks NAVER and Kakao were also net sold by 1.1 trillion won and 978.4 billion won respectively, while Samsung SDI and Hyundai Motor were net sold by over 800 billion won each.

In the KOSDAQ market, foreigners appeared to have exited the market by concentrating on selling large-cap stocks related to the index such as EcoPro BM, Pearl Abyss, Celltrion Healthcare, and Kakao Games.

The large-cap stocks that foreigners realized profits on and put up for sale were directly bought by individual investors. During this period, individuals net purchased 22.7123 trillion won in the domestic securities market. By market, they net bought 16.226 trillion won in the KOSPI and 4.2405 trillion won in the KOSDAQ.

The liquidity withdrawal by foreigners in the domestic stock market began in earnest as the Bank of Korea's Monetary Policy Committee entered a rate hike cycle from the second half of last year. The Monetary Policy Committee raised the base interest rate by 0.25 percentage points four times, totaling 1.00 percentage point, as of the 14th. Additionally, with the U.S. Federal Reserve (Fed) signaling a 'big step' (a 0.5 percentage point rate hike at once) at the Federal Open Market Committee (FOMC) meeting next month, there are forecasts that foreign capital outflow will accelerate.

Samsung Securities researcher Jinwook Heo said, "Both hawks and doves within the FOMC almost unanimously agree on quickly raising interest rates to a neutral level to ease demand-side inflationary pressures and induce a soft landing of the economy to the potential growth rate level," adding, "After the Fed raises rates by 50 basis points each in May and June, the remaining four hikes will be 25 basis points each, bringing the rate up to 2.5% by the end of this year."

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