Foreign investors have sold Korean stock worth about 31 trillion won (about 26 billion U.S. dollars) so far this year. The amount significantly surpasses their total net sale of Korean stock last year.
According to the Korea Exchange on Sunday, foreigners have net-sold Korean stock worth 30.73 trillion won (about 26 billion dollars) in total on the KOSPI market and the tech-heavy KOSDAQ market from January to August 20 this year. The value well exceeds their total net sale (24.7128 trillion won or 20.8 billion dollars) last year.
On a monthly basis, foreigners have continued to net-sell Korean stork from January to July except April (net-buy worth 82.9 billion won or 70 million dollars). They have continued selling shares on the KOSPI market every day beginning August 9, dumping Korean stock worth a total of 8.2 trillion won (6.93 billion dollars) for nine trading days. As a result, KOSPI posted a profit ratio of minus 4.43 percent this month, the lowest among major economies.
Analysts say foreigners stepped up their selling binge as the won currency against the U.S. dollar has constantly remained weak due to the resurgence of COVID-19 and signs of early economic tapering off in the U.S. Foreign net-selling is further fueled by lackluster performance of market-dominant Samsung Electronics shares due to a slowing semiconductor business in recent weeks. “Foreigners’ exit from Korea and slumping Korean stock will likely continue due to concern over a slowing global economy and a slumping semiconductor market,” said Kim Hak-gyun, research center chief at Shinyoung Securities. “If the U.S. starts tapering off within this year, capital flight from emerging markets could accelerate further.”