In brief
In September, foreign investors sold a net 19.11 trillion won of South Korean stocks, with the bulk of the outflow hitting the KOSPI and KOSDAQ. This sell‑off followed a second month of net withdrawals from the domestic bond market. Competing data from a separate brokerage report indicates a different story for foreign net positions.
In a sharp move that ties South Korea’s capital markets to global risk sentiment, foreign investors sold a net 19.11 trillion won (about 14.3 billion U.S. dollars) of local equities in September, according to data released by the country’s Financial Supervisory Service on Friday. The sale represents a shift for the second month running, with foreign capital also exiting the domestic bond market.
The bulk of the equity exodus was concentrated in the main KOSPI market, where foreign net sales totaled 17.45 trillion won. A secondary outflow of 1.66 trillion won came from the tech‑heavy KOSDAQ. Together, the sales reduced foreign holdings of listed shares to 2,296.0 trillion won by the end of the month, amounting to 34.8 percent of the overall market capitalization.
On the bond side, the foreign outflow was no less decisive. Foreign investors bought a net 127.0 billion won worth of local listed bonds last month, but with maturing debt anchored at 7.70 trillion won, the net disinvestment reached 7.57 trillion won. Foreign ownership of listed bonds now stands at 322.9 trillion won, covering 11.2 percent of all domestic bonds.
While Xinhua’s figures paint a picture of aggressive net selling abroad, alternate data surfaces a different narrative. A brokerage report, citing Aju Press, indicated that institutions were net sellers of Korean shares at 457.9 billion won, but foreign investors were net buyers, pulling a net 35.3 billion won. This divergence highlights differing views among market participants and data providers.
Additional information from the Korea Economic Research Center suggests that investor activity varied by country, with United Kingdom investors toppling as net sellers in September at 6.9 trillion won, followed by United States investors at 3.9 trillion won. The figures demonstrate that the sell pressure was not uniform across all foreign holdings, but rather concentrated among certain groups.
The juxtaposition of these datasets underscores the dynamic nature of foreign investment flows in South Korea. Stakeholders in the trading floors of Seoul’s exchanges and the desks in Seoul’s capital markets will be watching subsequent releases from the Financial Supervisory Service and independent brokerage research to clarify the net position of foreign investors for the month of October.
