Foreign investors turn net sellers of Korean stocks

Foreign investors turned net sellers of local stocks last month, stemming a two-month straight buying binge due largely to persisting global uncertainties, the financial regulator said Monday.

Overseas investors dumped a net 1.1 trillion won ($1.0 billion) worth of local equities in October, the largest net selling since the 3.38 trillion won tallied in May, according to the Financial Supervisory Service.

Foreigners had remained net buyers for the two previous months, snapping up a net 9.6 trillion won in total.

The October selloff came on the heels of dampening global market conditions due to lackluster corporate performances here and abroad, and concerns over the lagging process of bailing out Spain, the FSS said.

The recent appreciation of the local currency also contributed to the net selling as it prompted an outflow of foreign funds, especially led by the United States, seeking to take profit from a currency gain, it noted.

The value of their shareholdings reached 387.8 trillion won as of the end of October, with their portion of stock ownership coming to 31.6 percent of the total market cap, little changed from 31.8 percent a month earlier.

The U.S. topped other countries with the selloff, offloading a net 1.41 trillion won, followed by Luxembourg with a net 258 billion won. The U.S. and three others, including Germany and Saudi Arabia, reverted to net sellers in October from net buyers the previous month.

British and Singaporean investors stayed as net buyers, but the amount of their investments sharply declined, the FSS said.

Meanwhile, foreign ownership of local bonds rose slightly to 88.7 trillion won last month, from 88.3 trillion won in the previous month, largely due to increased demand from central banks around the globe.

Foreigners bought a net 400 billion won worth of bonds in October, with Chile and Norway being the largest investors. They invested a net 555 billion won and 348 billion won, respectively, according to the FSS. (Yonhap News)