Foreigners, 'Palja' for 2 Consecutive Weeks... Selling KOSPI and Buying KOSDAQ

[Asia Economy Reporter Song Hwajeong] Foreign investors showed a selling trend in the domestic stock market for two consecutive weeks. They recorded net sales in the KOSPI market but showed net purchases in the KOSDAQ market.

According to the Korea Exchange on the 20th, foreign investors net sold about 686.2 billion KRW in the domestic stock market during the week from the 14th to the 18th. Foreign investors sold 876.3 billion KRW in the KOSPI market, while they bought 191.1 billion KRW in the KOSDAQ market.

The stock most purchased by foreign investors last week was HYBE. Foreign investors net bought HYBE for 188.9 billion KRW last week. This was followed by LG Household & Health Care with net purchases of 182.7 billion KRW. Other net purchases included Samsung SDI (97.7 billion KRW), LG Chem (96.8 billion KRW), Naver (NAVER·79.4 billion KRW), Hyosung TNC (75.1 billion KRW), LG Electronics (57.3 billion KRW), EcoPro BM (55.9 billion KRW), Hanwha Solutions (53.0 billion KRW), and Genexine (45.4 billion KRW).

The stock most sold by foreign investors last week was Samsung Electronics. Foreign investors net sold Samsung Electronics for 445.3 billion KRW last week. They have sold Samsung Electronics the most for two consecutive weeks. This was followed by Kakao, which was sold for 313.0 billion KRW. Other top net sales by foreign investors included Hyundai Motor (180.5 billion KRW), POSCO (POSCO·81.2 billion KRW), SK Hynix (73.0 billion KRW), Shinsegae (72.1 billion KRW), SK Innovation (71.2 billion KRW), LG Display (68.8 billion KRW), OCI (58.0 billion KRW), and NCSoft (50.6 billion KRW).

Although discussions on tapering (asset purchase reduction) have begun in the United States, it is expected that foreign investor outflows will not intensify. An Soeun, a researcher at IBK Investment & Securities, explained, "Unlike the 2014 tapering case, the liquidity inflow into Korea through quantitative easing was not initially large," adding, "Since foreign funds inflowed through advanced countries' quantitative easing are small, even if the policy shifts to monetary tightening, there is little room for foreign funds to exit." While the prolonged absence of foreign investor demand since COVID-19 is a concern, the fact that foreign investor outflows are not intensifying itself can provide reassurance to the stock market. Researcher An added, "Among emerging markets, Korea's economic and earnings fundamentals are relatively strong," and "Even under tapering risk, the downward pressure on the stock market due to foreign investor demand will be limited."