Foreign net buying of Korean stocks hits 2-year high in November

Foreign investors showed insatiable appetite for Korean stocks last month, gobbling up nearly 4 trillion won ($3.1 billion) worth shares in the main Kospi market in search of alternative assets to risky China stocks and exchange gains from the still weak Korean currency against the U.S. dollar.

According to Korea Exchange (KRX) data on Thursday, foreign investors net bought about 3.91 trillion won worth of Kospi-listed stocks in November, the largest since November 2020 when their net purchases amounted to 4.99 trillion won.

Thanks to their strong buying, the benchmark Kospi increased 7.8 percent last month, which is the Kospi’s highest monthly gain since a 10.89 percent rally in December 2020.

Market experts say foreigners’ strong demand for Korean stocks was mainly driven by funds escaped from the unstable Chinese market. The Korean won’s still weak value against the U.S. dollar also made Korean stocks attractive.

The most bought stocks among foreigners last month were LG Energy Solution (826.1 billion won in net purchase), Samsung Electronics (739.2 billion won), Samsung SDI (309.1 billion won), and Samsung Electro-Mechanics (201.3 billion won).

Notably, foreign investors made massive net purchasing of market-tracking index products such as KODEX 200 and TIGER 200, two exchange-traded funds that track Kospi 200. They were ranked 3rd and 9th, respectively, in the list of foreign net purchases last month.

Market analysts said the strong net buying by foreign investors reflects their expectations for a possible change in global monetary tightening and global economic recovery next year. But others warned of limited rebound due to lingering uncertainties from concerns over weak corporate performance and high interest rates.