Foreigners Withdraw 400 Billion KRW from Korean Stocks Last Month... "Profit-Taking on Secondary Batteries"

[Image source=Yonhap News]

Last month, foreign investors withdrew approximately 400 billion KRW from the Korean stock market. However, bond funds saw an inflow of more than 4 trillion KRW.

According to the "International Finance and Foreign Exchange Market Trends" released by the Bank of Korea on the 12th, foreign investment in Korean stocks recorded a net outflow of 310 million USD last month. Based on the end of June's KRW-USD exchange rate (1,317.7 KRW), this amounts to about 408.5 billion KRW.

Foreign investment in domestic stocks turned to a net outflow for the first time in three months. A Bank of Korea official explained, "Profit-taking sales centered on certain sectors such as secondary batteries continued, leading to the shift to net outflow."

However, foreign investment in domestic bonds last month recorded a net inflow of 3.23 billion USD (approximately 4.2562 trillion KRW). This marks the fourth consecutive month of net inflow. The Bank of Korea official analyzed, "The inflow amount decreased due to the large-scale maturity of bonds."

The total foreign securities investment, combining stocks and bonds, showed a net inflow of 2.92 billion USD.

The credit default swap (CDS) premium for Korean government bonds (based on the 5-year Foreign Exchange Stabilization Fund bonds) averaged 35 basis points (1 bp = 0.01 percentage point) last month. This is the lowest level since April of last year (33 bp).

CDS are financial derivatives that act 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.