Foreign Investors Sell South Korean Stocks for Seventh Straight Month

Foreign investors continued their trend of selling South Korean stocks in July, marking the seventh consecutive month of net sales. However, the pace of selling slowed compared to the previous month, offering a slight reprieve in the outflow of foreign capital.

According to data released by the Financial Supervisory Service, foreign investors offloaded a net 30.776 trillion won worth of stocks on the KOSPI market and an additional 889 billion won on the KOSDAQ. This brought the total net selling of stocks in July to 31.665 trillion won, a decrease from the 49.336 trillion won sold in June.

While stocks saw net sales, foreign investors increased their holdings in the bond market. They made a net investment of 2.388 trillion won in listed bonds during July. This inflow into bonds partially offset the outflows from the stock market, leading to a total net withdrawal of 29.276 trillion won from the overall South Korean securities market for the month.

The value of foreign holdings in listed stocks decreased significantly by 653.1 trillion won to 2,255.545 trillion won by the end of July. This substantial drop was largely attributed to the sharp decline in the stock market, with the KOSPI falling 22.2% and the KOSDAQ dropping 21.4% in July. Consequently, the proportion of foreign ownership in the total market capitalization also decreased from 36.4% in June to 35.8% in July.

Geographically, European investors were the largest net sellers, offloading 25.7 trillion won, with a significant portion of that coming from the United Kingdom alone (20.237 trillion won). Investors from Asia and the Middle East also engaged in net selling. In contrast, North American investors turned into net buyers, with the United States alone purchasing 3.452 trillion won, ending a nine-month selling streak.