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Foreigners' buying binge of Korean stocks continuing this year: data

Foreign investors have raked in some 1.5 trillion won ($1.3 billion) worth of South Korean stocks this year on improved economic outlook and the imminent signing of a preliminary Sino-American trade deal, data showed Wednesday.

During the Jan. 2-14 period, foreigners net purchased a total of 1.52 trillion won worth of local stocks, continuing their buying streak for an eighth straight session through Tuesday.

"Foreign buying has been strong on hopes for further progress in the US-China trade tussle and for the US lifting of China from its designation as a currency manipulator," said Park Woo-yeol, an analyst of HI Investment & Securities Co. 


"The earnings season has begun for the major companies here, which also influenced foreign buying," he added.

By sector, semiconductor-related shares led the gains on the main bourse, while consumer goods makers and automakers remained sluggish.

Foreigners net bought semiconductor-related stocks worth some 808.2 billion won, or about 44.9 percent of their 1.8 trillion won net purchase on the main bourse. Internet and software shares also enjoyed strong foreign buying.

According to the main bourse data, foreigners net bought 1 trillion won worth of local shares in 2019, turning from the previous year's selling binge of 5.7 trillion won.

They net purchased 810 billion won worth of local stocks in December last year after offloading 2.84 trillion won in November.

Thanks to the eased trade uncertainties at home and overseas, the benchmark Korea Composite Stock Price Index has flown high this year, having closed at 2,238.88 points Tuesday, up 2.93 percent from the year's first session at 2,175.17 points.

Asia's fourth-largest economy is expected to grow 2.3 percent this year, rebounding from last year's estimated 2 percent expansion, on the back of a recovery in the chipmaking sector and a base effect.

The country's exports fell 10.3 percent on-year in 2019 to $542.4 billion but are projected to expand 3 percent this year, the finance ministry estimated earlier.

On Tuesday, South Korean President Moon Jae-in voiced confidence that South Korea's exports can rebound this year, and the nation's economy will make a leap forward.

In the latest sign pointing to a recovery in the country's outbound shipments, exports rose 5.3 percent in the first 10 days.

Analysts said foreign buying may turn weak again down the road.

"The market gains are narrowing as investors attempt to cash in recent gains," Samsung Securities analyst Lee Hyuk-jin said.

Market sentiment is again weighed down by expectations that the US is unlikely to roll back its tariffs on Chinese goods within this year, he added.

 Seo Sang-young, an analyst at Kiwoom Securities also warned against a possible break in the market's upward trend. (Yonhap)