Foreigners Withdraw '2.2523 Trillion Won' from Domestic Stocks in March

[Image source=Yonhap News]

It was revealed that foreigners sold about 2.2523 trillion won worth of domestic stocks last month.

According to the "International Finance and Foreign Exchange Market Trends" announced by the Bank of Korea on the 10th, foreign stock investment funds saw a net outflow of 1.73 billion dollars in March.

Based on the won-dollar exchange rate at the end of March (1,301.9 won), this amounts to approximately 2.252287 trillion won.

Foreign investment funds in domestic stocks recorded net inflows for five consecutive months from October last year to February this year but switched to net outflows after six months.

The Bank of Korea explained, "Due to the impact of the Silicon Valley Bank (SVB) and Credit Suisse (CS) incidents, risk-averse sentiment has strengthened, leading to a shift to net outflows in stock investment funds."

Last month, foreign investment funds in domestic bonds recorded a net inflow of 1.81 billion dollars (approximately 2.3564 trillion won).

Foreign investment funds in domestic bonds had previously recorded net outflows of 2.73 billion dollars in December last year, 5.29 billion dollars in January this year, and 520 million dollars in February.

The Bank of Korea analyzed, "Bond funds switched to net inflows as some institutions increased bond purchases due to expanded arbitrage incentives."

The total foreign securities investment funds, combining stocks and bonds, were recorded as a net inflow of 80 million dollars. This means that more funds entered the Korean securities market than exited.

After a net outflow of 340 million dollars in January, this marks two consecutive months of net inflows, including February.

The credit default swap (CDS) premium for Korean government bonds (based on the 5-year Foreign Exchange Stabilization Fund bonds) averaged 43 basis points (1bp = 0.01 percentage points) last month. This is 1 point higher than February's 42.

CDS is a type of financial derivative that acts like insurance, compensating for losses when the issuing country or company defaults. Generally, if the economic risk of the country increases, the premium also rises.

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