April 20, 2024

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[THE INVESTOR] Foreign investors’ holdings of local stocks hit an all-time high of 528.8 trillion won (US$463 billion) in March as they eyed shares of the nation’s top listed companies, the Financial Supervisory Service said on April 10.

In March, foreign investors bought a net 3.3 trillion won shares, including 3.2 trillion won on the benchmark KOSPI and 100 billion won on the secondary tech-savvy KOSDAQ.

Their share made up 32.4 percent of the total market capitalization. 

By nationality, investors from the US, Cayman Islands and Canada were the top three net-buyers, while those from the UK, Israel and France were top net-sellers.

Investors from the US -- accounting for 41.8 percent of the total overseas investors -- bought a net 3.9 trillion won shares, followed by the Cayman Islands and Canada who bought 174 billion won and 168 billion won, respectively.

This month, however, they are off-loading shares especially in the IT, finance and chemicals sectors amid growing uncertainties over the US government’s upcoming currency report that is expected to come out later this month.

“The Korean stock market is still attractive in terms of valuation with relatively low price-earnings ratios and rosy earnings growth overall,” said Meritz Securities analyst Jeong Dai. “However, looming uncertainty over North Korean risks and the US currency report poses a threat to local bourses.”

Song Seung-yeon, an analyst at Korea Investment and Securities, also pointed out that the recent dollar rally against the Korean won is affecting foreigners’ investment sentiment.

“The dollar was trading at around 1,200 won at the beginning of this year but fell to near 1,100 won, boosting investors’ expectations on emerging markets, but last week alone the exchange rate soared more than 20 won,” she wrote in her latest report.

Meanwhile, overseas traders held 98.7 trillion won in bonds as of end-March, adding 2.6 trillion won from the previous month. Their holdings of local debt accounted for 6.1 percent of the total.

By Park Ga-young (gypark@heraldcorp.com)