Korean investors flee domestic stocks as U.S. market booms

Amid growing pessimism surrounding the Korean economy, domestic shareholders are increasingly exiting the local stock market. According to Democratic Party of Korea lawmaker Kim Hyeon-jeong, a member of the National Policy Committee of the National Assembly, the volume of overseas stock trades by domestic investors, including both purchases and sales in the U.S., surged by 156.419 billion shares in 2024—up 39.1% year-over-year from 112.435 billion shares in 2023. In contrast, trading in the domestic stock market declined by 13% over the same period to 635.254 billion shares, marking a sharp drop from 2021, when it reached 1.228 trillion shares. While the U.S. stock market soared to record highs, driven by the rise of new and innovative companies, the KOSPI fell by 9.6% in 2024 despite government-led initiatives to boost market value. This shift has led to a significant migration of investors away from domestic stocks.

Experts attribute this trend to a widening gap in the innovative capacity of Korean and American companies, which has contributed to a stark difference in market competitiveness. An analysis by The Dong-A Ilbo based on data from the Federation of Korean Industries shows that between 2016 and 2024, the total market capitalization of the 10 largest U.S. tech companies, including Nvidia, increased 5.6 times, whereas their Korean counterparts saw only a 33.8% rise. Ha Joon-kyung, an economics professor at Hanyang University, warned that the Korean stock market risks long-term decline if this exodus continues.


이동훈기자 dhlee@donga.com