Foreigners, 4 Consecutive Weeks of 'Selling'... Buying KOSPI, Selling KOSDAQ

[Asia Economy Reporter Song Hwajeong] Foreign investors continued their selling streak in the domestic stock market for the fourth consecutive week. However, they turned to buying in the KOSPI.

According to the Korea Exchange on the 24th, foreign investors net sold approximately 114.7 billion KRW in the domestic stock market during the week from the 18th to the 22nd. Foreign investors purchased 60 billion KRW in the KOSPI market, while they sold 174.7 billion KRW in the KOSDAQ market.

The stock most purchased by foreign investors last week was Samsung SDI. Foreign investors net bought Samsung SDI for 199.2 billion KRW last week. This was followed by Kakao, which they bought for 86.5 billion KRW. Other stocks net purchased included SK Hynix (79.1 billion KRW), Samsung Electronics (77.5 billion KRW), SK Bioscience (61.6 billion KRW), Kia (57.8 billion KRW), Hyundai Motor (53.6 billion KRW), JYP Ent. (53.5 billion KRW), SK Innovation (51.2 billion KRW), and KB Financial Group (36.2 billion KRW).

The stock most sold by foreign investors last week was POSCO. Foreign investors net sold POSCO for 100.3 billion KRW last week. This was followed by Samsung Electro-Mechanics, which they sold for 89.7 billion KRW. Other stocks in the top foreign net sales included Doosan Heavy Industries & Construction (78.6 billion KRW), Samsung Electronics Preferred Shares (69.5 billion KRW), Kakao Bank (60.1 billion KRW), NCSoft (58.7 billion KRW), L&F (45.1 billion KRW), SK Telecom (45.1 billion KRW), EcoPro BM (44.1 billion KRW), and SK IE Technology (41.4 billion KRW).

There is an opinion that the environment for the return of foreign investors is being established. Junho Byun, a researcher at Heungkuk Securities, said, "The aggressive selling trend by foreign investors seems to have ended since mid-last week, which was the point when the September Federal Open Market Committee (FOMC) minutes hinted at tapering (asset purchase reduction)." He analyzed, "This made the tapering at the November FOMC a foregone conclusion, and the dollar's strength is showing signs of peaking out." It is expected that foreign capital will flow in actively once energy prices stabilize. Researcher Byun said, "Concerns about rising energy prices are ongoing, so although the selling trend by foreign investors has ended for now, it is still too early to say they are actively buying KOSPI." He added, "There is a possibility of a short-term correction in KOSPI due to rising energy prices, but considering the excessive sluggishness of KOSPI within Asia, the possibility of price adjustment due to aggressive foreign selling is low." He further added, "On the contrary, if expectations for energy price stabilization emerge, there is a high possibility that foreign investors will adjust their Asian stock portfolios and funds will flow into KOSPI."