Despite the continuous rise of the South Korean stock market, which has repeatedly set new historical highs driven by inflows of domestic capital and the artificial intelligence boom, foreign investors are further reducing their holdings of South Korean stocks. Compiled data shows that since May, the net selling of South Korean stocks by foreign investors has reached USD 11.5 billion, poised to become the third-largest monthly withdrawal on record, following the unprecedented capital outflows in February and March of this year. South Korean retail investors, who largely missed out on last year's stock market rally, are now entering the market in large numbers, contributing to the continued upward trend of the Korea Composite Stock Price Index (KOSPI). This benchmark index has risen by 8.7% year-to-date, leading the gains among major global stock indices tracked by Bloomberg. Domestic institutions in South Korea have also been increasing their holdings simultaneously. Vey-Sern Ling, Managing Director at Union Bancaire Privée, stated, "Foreign investors have always been fickle, especially short-term hot money like hedge funds, while domestic investors have now become a more solid cornerstone supporting the market." He added that the strong performance of memory chip companies such as Samsung Electronics and SK Hynix is a core factor attracting domestic capital into the market.
Comments