Foreigners Net Buying for 5 Consecutive Months... Semiconductor and Value-Up Expectations

The stock market and exchange rate status are displayed on the electronic board in the dealing room of Hana Bank's Euljiro headquarters in Seoul. Photo by Younghan Heo younghan@

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Foreign investors have been net buyers of Korean stocks for five consecutive months, driven by improvements in the semiconductor industry and expectations for the government's value-up policies.

According to the Bank of Korea's "International Financial Foreign Exchange Market Trends since March 2024" report released on the 11th, the net inflow of foreign investment funds into domestic stocks last month reached $3.84 billion (5.23 trillion KRW).

Foreign investors have been net buyers of Korean stocks for five consecutive months since November last year. The total net purchase amount reached $17.1 billion (23.31 trillion KRW).

A Bank of Korea official explained, "The continued net buying of Korean stocks by foreign investors is due to the recovery in the semiconductor industry and ongoing expectations for the government's measures to address undervaluation in the domestic stock market."

On the other hand, foreign investment in domestic bonds saw a net outflow of $3.39 billion (4.62 trillion KRW) last month. The Bank of Korea explained that bond funds experienced net outflows due to continued low arbitrage incentives amid favorable foreign currency liquidity conditions and large-scale maturity repayments.

Due to the net outflow of bond funds, the overall net inflow of foreign investment funds combining stocks and bonds was $440 million, significantly down from $8.1 billion recorded in February.

Last month, the KRW-USD exchange rate rose compared to February. This increase is attributed to the stagnation of U.S. disinflation, concerns over delayed Federal Reserve rate cuts, and the weakening of neighboring countries' currencies.

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