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Global stock funds log 1st net outflow from Korea in 32 weeks

Global equity funds have posted a net outflow from South Korea for the first time in 32 weeks amid foreign investors' massive profit-taking, industry data showed Monday.

Four international funds investing in South Korea withdrew a net 55 billion won ($48.3 million) from the local stock market in the week to Wednesday, according to the data by Mirae Asset Daewoo Securities Co. and global fund tracker Emerging Portfolio Fund Research.

The equity funds, including US investment fund Global Emerging Markets, had been chalking up net inflows into South Korea since the second week of January after recording an outflow the prior week.

(Yonhap)
(Yonhap)

The net outflow was attributed mainly to a withdrawal of $1.6 billion from funds investing in emerging-market stocks.

"The amount accounted for a mere 0.15 percent of the global funds' total assets, but it marked the first net outflow from South Korea since January," said Lee Jin-ho, a researcher at Mirae Asset Daewoo Securities. "It is seen as a temporary phenomenon stemming from foreigners' profit-taking."

Offshore investors, the main driver of the local stock market's bull run in the first half, started to take profits from gains in large caps from late July, ushering in a short period of market correction.

During the one-week period, funds investing in Asia, excluding Japan, and global emerging market funds registered a net outflow of $1.2 billion and $300 million, respectively.

In contrast, funds investing in stocks and bonds in advanced economies reported a net inflow of $300 million and $3.6 billion each, according to the data. (Yonhap)
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