Foreign Capital Posts Net Outflow for Third Month in April... Outflow Narrows

Net Outflow of $2.13 Billion for Third Consecutive Month Since February
Stock Funds Saw $2.68 Billion Outflow Amid Middle East Conflict
However, Net Outflow Narrowed as Investor Sentiment Recovered After Ceasefire Agreement

Foreign capital continued to flow out of the domestic stock market for the third consecutive month. However, since the ceasefire agreement between the United States and Iran on the 7th of last month, investor sentiment has partially recovered, resulting in a significant reduction in the outflow of stock funds. Meanwhile, bond funds turned to a net inflow, influenced by the inclusion in the World Government Bond Index (WGBI).

On the 15th, when the KOSPI index surpassed the 8,000-point mark intraday for the first time in history, Samsung Electronics' stock price was displayed on the electronic board of Hana Bank's dealing room in Jung-gu, Seoul.

According to the "Trends in International Finance and Foreign Exchange Markets Since April 2026" published by the Bank of Korea on May 15, foreign capital in the domestic stock and bond markets recorded a net outflow of 2.13 billion dollars last month. This marks the third consecutive month of net outflows since February.

The net outflow was primarily due to stock funds. Specifically, stock funds experienced a net outflow of 2.68 billion dollars. A Bank of Korea official explained, "Stock funds have seen net outflows for four consecutive months due to concerns over geopolitical risks in the Middle East." However, the net outflow was significantly reduced compared to the previous month (-3.655 billion dollars), largely as a result of a partial recovery in investor sentiment following the ceasefire agreement between the United States and Iran.

Bond funds recorded a net inflow of 550 million dollars. Despite low arbitrage incentives, the inclusion in the WGBI led to increased mid- to long-term investment in government bonds, resulting in a turnaround to net inflow.

The won-dollar exchange rate fell to 1,483.3 won at the end of April, down from 1,530.1 won at the end of the previous month. The rate dropped to the 1,450 won range amid expectations for progress in the US-Iran peace talks and the strengthening of the yen, but the decline slowed due to fading expectations of peace and net selling of domestic stocks by foreign investors. The day-to-day volatility of the won-dollar exchange rate was 0.59%, down from 0.76% in March.

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