Foreigners Sold Off 15 Trillion Won of Domestic Stocks This Year

KOSPI Down 11%, KOSDAQ Down 15% Since Early Year
Foreigners Sell 15 Trillion Won, Institutions Also Offload 9 Trillion Won

[Asia Economy Reporter Minji Lee] Foreign investors have sold off approximately 15 trillion won worth of domestic stocks so far this year.

According to the Korea Exchange on the 22nd, as of the 20th, foreign investors have net sold a total of 14.8 trillion won worth of domestic stocks since the beginning of the year. They sold 11.8 trillion won in the KOSPI market and 3 trillion won in the KOSDAQ market.

In March, foreign investors net sold 5.1 trillion won worth of stocks in the KOSPI market, marking the largest net sale since August last year, and continued the 'Sell Korea' trend by net selling 4.9 trillion won worth of stocks last month as well.

The top two most sold stocks were Samsung Electronics and LG Energy Solution. Foreign investors sold 5.1602 trillion won worth of Samsung Electronics and net sold 2.8953 trillion won of LG Energy Solution. NAVER (1.459 trillion won) and Kakao (1.1481 trillion won), which have continued to show sluggish stock performance this year, were also sold off by more than 1 trillion won each. This is analyzed as a sharp decline in investment sentiment toward risk assets amid growing concerns over an economic recession and the strengthening global interest rate hike trend.

Institutional investors also net sold stocks worth 9 trillion won, contributing to the downward pressure on the stock market. Institutions net sold Samsung Electronics the most, with 6.0832 trillion won, followed by SK Hynix with 1.1258 trillion won. As the net selling by foreign and institutional investors increased, the KOSPI fell by 11.36% and the KOSDAQ index dropped by 14.90% so far this year.

On the other hand, individual investors absorbed the sell-offs from foreign and institutional investors. Individuals net bought a total of 24 trillion won worth of stocks in the KOSPI market (18.5 trillion won) and the KOSDAQ market (5.4 trillion won) this year. Samsung Electronics accounted for half of the total net purchases, reaching 11.0308 trillion won. Additionally, NAVER (2.0515 trillion won), Kakao (1.5375 trillion won), and Samsung Electronics Preferred Shares (1.3576 trillion won) were also purchased in amounts exceeding 1 trillion won.

However, recently, the selling pressure from foreign investors has weakened, raising expectations for a market rebound. Seungjin Shin, a researcher at Samsung Securities, stated, “The dollar index, which influenced foreign investor flows, has recently shown signs of declining, and the continuous selling by foreign investors has been in a lull since last week,” adding, “Due to the sustained selling by foreign investors, the Korean won weakened to around the critical level of 1,300 won, enhancing the price attractiveness of the domestic stock market, making a rebound highly likely.”