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Foreign investment in S. Korean stocks halves in June

July 9, 2014

SEOUL (Yonhap) — Foreign investors remained net buyers of local stocks for the third straight month in June, but the amount of their investment was halved on forecasts that the strong local currency would have a negative impact on the country’s exports, the financial watchdog said Wednesday (KST).

Foreigners snapped up a net 700 billion won (US$692 million) worth of local shares last month, compared with a net purchase of 1.45 trillion won in the previous month, according to the Financial Supervisory Service (FSS).

Their cumulative holdings came to 437.5 trillion as of the end of June, accounting for 32.5 percent of the total market capitalization, unchanged from the previous month, added the FSS.

South Korea’s steady economy attracted foreign investment amid the global recovery trend, but the strong Korean won failed to give a further boost, the FSS said.

The local currency appreciated more than 4 percent against the U.S. dollar during the first six months of the year, hitting six-year highs at the end of June.

Asian countries led the net purchase, with Japanese investors scooping up a net 500.3 billion won worth of local shares and Qatar buying a net 268.1 billion won, the FSS said.

In contrast, investors from the Cayman Islands dumped a net 299.6 trillion won worth of local equities, and those from Singapore offloaded 260.2 billion won.

Foreigners bought a net 400 billion won worth of bonds from the local market, with their amount of holdings valued at 97.6 trillion won as of end-June, slightly up from 97.2 trillion won a month earlier.

South African investors were the biggest buyers, with a net 817 billion won, followed by those from Hong Kong and France with 503.3 billion won and 256.9 billion won, respectively, the watchdog said.