Foreign investors returned to selling South Korean equities in September, dumping a net $14.2 billion worth of listed shares just a month after turning net buyers for the first time this year, according to data released by the Financial Supervisory Service on October 30.
The September outflow followed seven consecutive months of net selling through July, before foreign investors made a brief return to net buying in August.
Foreign investors sold a net $12.9 billion in shares on the Korea Exchange’s main Kospi market and $1.2 billion on the tech-heavy Kosdaq market, the regulator said.
Despite the September selloff, the value of foreign investors’ stock holdings rose by $11.4 billion from the previous month to $1.70 trillion at the end of September, reflecting changes in market valuations. Foreign investors held 34.8% of South Korea’s total stock-market capitalization, unchanged from August.
The combined market capitalization of listed shares increased by $30.0 billion to $4.89 trillion from $4.86 trillion a month earlier.
By region, European investors were the biggest net sellers, offloading $7.6 billion in shares. Investors in the Americas sold a net $3.6 billion, while those in Asia sold $1.3 billion. Middle Eastern investors were net buyers, purchasing about $74 million.
By country, Luxembourg and Ireland were net buyers, with purchases of approximately $741 million and $593 million, respectively. U.K. investors sold a net $5.1 billion, while U.S. investors sold $2.9 billion.
Foreign investors also remained net redeemers of South Korean bonds for a second consecutive month.
In September, they purchased a net $94 million in listed bonds but received $5.7 billion in principal repayments on maturing securities, resulting in net redemptions of approximately $5.6 billion.
Asian investors were net buyers of $2.0 billion in bonds. European investors led net redemptions at $5.0 billion, followed by Middle Eastern investors at $889 million and U.S. investors at $593 million.
By bond type, foreign investors recorded net redemptions of $3.6 billion in government bonds and $2.0 billion in special bonds. At the end of September, they held $229.9 billion in government bonds, accounting for 96.1% of their listed bond holdings, and $9.2 billion in special bonds, or 3.8%.
Foreign holdings of listed bonds fell by $5.5 billion from the previous month to $239.2 billion at the end of September. Their share of the total outstanding listed bond market declined by 0.2 percentage point to 11.2%.
