Foreigners' net selling of local stocks hit a nearly two-year high last month, as the U.S. Federal Reserve's signal to gradually end its easy-money policy prompted them to leave the Seoul market, the financial regulator said Friday.
Overseas investors sold off a net 5.14 trillion won (US$4.51 billion) worth of local equities in June, a turnaround from the 300 billion won net purchase the previous month, according to the Financial Supervisory Service (FSS).
The June figure is the largest net selling by foreigners since the 5.92 trillion won tallied in August 2011, the FSS said. The value of foreign investors' shareholdings reached 387.6 trillion won as of the end of June, down 35.3 trillion won from a month earlier, with the portion of stock ownership falling to 31.1 percent in the same period.
Last month, uncertainties about whether the Fed will choose an exit strategy had unnerved foreigners, before Fed Chairman Ben Bernanke suggested a tapering of its quantitative easing (QE) from later this year, sparking a big outflow of foreign funds, the FSS noted.
U.S. and European investors led the spree, with the former extending its selling binge for the sixth consecutive month worth a combined 6.6 trillion won. In June, the U.S. and Europe unloaded 2.61 trillion won and 3.30 trillion won each.
Canada and the Virgin Islands, however, snapped up local stocks worth a net 158 billion won and 83.5 billion won, respectively.
Foreign ownership of local bonds stood at 101.2 trillion won last month, up from 98.7 trillion won in May, as investors opted to increase bets in safer assets, the regulator added.
They bought a net 2.6 trillion won worth of bonds, with Luxembourg and the U.S. being the biggest investors with a net 1.16 trillion won and 945 billion won, respectively, according to the FSS. (Yonhap News)
