Foreign investors snap stock-buying streak to become net sellers in August

Foreign investors turned into net sellers of Korean stocks in August, ending a 10-month buying streak, with tech shares leading the sell-off.

Dollars are displayed at Hana Bank’s Counterfeit Notes Response Center in Jung District, central Seoul, on Oct. 6. 2023. [YONHAP]

Foreign investors turned into net sellers of Korean stocks in August, ending a nine-month buying streak, with tech shares leading the sell-off.

The bond market, however, saw a steep increase in foreign capital inflow ahead of anticipated U.S. rate cuts.

According to the Bank of Korea’s report on the international financial market, foreign investors offloaded stocks with a net value of $1.85 billion last month.

This is the first time since October of last year that foreigners have been net sellers of Korean stocks.

“Skepticism toward the growth potential of the global AI sector drove the selling of electronics stocks, resulting in the first net sell-off from foreign investors since October of last year,” said the Bank of Korea.

Samsung Electronics saw the biggest net outflow of foreign investment in August among all listed stocks in Korea, with SK hynix trailing, data compiled by the Korea Exchange showed.

Foreign investors shed a net 2.09 trillion won ($1.57 billion) worth of Samsung Electronics stocks in August, and sold SK hynix stocks worth 900.3 billion won.

On the other hand, foreign capital inflow surged in bond trading, with investors eyeing short-term gains amid growing market volatility ahead of widely expected rate cuts in the United States. Foreign investors net bought bonds worth $5.47 billion in August, a sharp jump from the $380 million in the previous month.

This resulted in a net increase in total foreign investment in Korean securities of $3.63 billion in August.

Meanwhile, the won-dollar exchange rate volatility expanded to 0.43 percent in August compared to the previous month, yet remained below last year's average of 0.47 percent.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]