Data released by the Bank of Korea on Thursday revealed that foreign investors recorded the largest-ever monthly net outflow from South Korean equities in February. This significant movement was driven by growing concerns over potential risks associated with the artificial intelligence bubble and profit-taking activities.
According to the central bank's figures, foreign investors net sold $13.5 billion worth of South Korean stocks last month. This follows a net sale of $500 million in January.
The February data set a new historical high, surpassing the previous record of $11.04 billion established in March 2020.
In the bond market, foreign investors net purchased $5.74 billion in bonds during February, a notable increase from the $2.44 billion purchased in January.
Overall, foreign investors net sold $7.76 billion in South Korean securities last month. This marks a sharp reversal from the net purchase of $2.39 billion recorded in January.
The net outflow figure for February represents the second-highest monthly net outflow since July 2008, when a record outflow of $8.97 billion was recorded.
An official from the Bank of Korea's International Financial Trends team stated, "Equity funds recorded the largest monthly net outflow as investors grew more cautious regarding AI-related investments and engaged in profit-taking following the recent rally in the South Korean stock market."
"The net inflow into bond funds increased, primarily supported by bargain-hunting prompted by rising market interest rates and robust investment demand, particularly from the private sector."
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