Foreign investors, have taken a break from their massive selling spree this month, scooping up shares onthe South Korean benchmark Kospi worth roughly 1.5 trillion won ($1.07 billion) in trading up to Friday.
According to data provided by the country's main bourse operator, Korea Exchange, offshore investors net bought shares amounting to 1.47 trillion won on the Kospi from May 2 to 16.
Outside of May 2, when foreigners offloaded shares worth 167 billion won, they were net buyers on the market for eight consecutive trading days from May 7 to 16. There were nine trading days up to May 16 because of public holidays.
The buying spree marks a contrast from foreign investors being net sellers on the Kospi for nine straight months since August, offloading a total of 34.15 trillion won. In April, foreign investors dumped shares worth 9.35 trillion won on the bourse, setting a new high on the exodus.
The turnaround comes on the back of the won’s recent appreciation against the dollar. After weakening to 1,479 won to the US dollar on April 8, the local currency strengthened against the greenback to the 1,400 won level.
A stronger won can be appealing for foreign investors to put their money in won-denominated assets, expecting a gain from further appreciation of the won.
Chip giant SK hynix was the top-purchased stock for foreign investors this month, as they raked in 1.29 trillion won of shares, followed by energy solutions providers Doosan Enerbility and HD Hyundai Electric at 273 billion won and 147 billion won, respectively.
Yet, foreign hands dumped their holdings of tech behemoth Samsung Electronics, net selling shares worth 559 billion won this month. With the sell-off, foreign ownership of Samsung Electronics’ shares dropped to 49.7 percent from 56.5 percent in July.
“Foreign investors are continuing the net buying on the back of the improved investor sentiment in the global stock markets,” said analyst Lee Kyung-min at Daishin Securities. “The anticipation of the won appreciation led to the net buying of foreign investors. The foreigners’ move will set the tone for the Kospi’s gain.”
On Monday, foreign hands dumped shares worth 114 billion won on the Kospi due to the dampened investor sentiment following the downgrade of the US sovereign credit rating by Moody's. When including the latest figure, foreign investors' net buying on Kospi stands at 1.36 trillion won this month.
With the net-selling move, the local won weakened by 8.2 won on-day, wrapping up daytime trading at 1,397.8 won per dollar.
silverstar@heraldcorp.com
