Foreigners Withdraw 1.8 Trillion Won from Bond Market Last Month

Foreigners Net Purchase of Listed Stocks Worth 3.9 Trillion Won Last Month
Two Consecutive Months of Net Buying Following July

On the 7th, when the won-dollar exchange rate surpassed 1,380 won for the first time in 13 years and 5 months, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Ji Yeon-jin] Last month, foreigners withdrew more than 1.8 trillion won from the domestic bond market. Following June, when foreigners withdrew funds from the domestic bond market for the first time in 18 months, this marks the second time in two months that net withdrawals were recorded. Meanwhile, they purchased nearly 4 trillion won worth of stocks, marking two consecutive months of net buying.

According to the "August 2022 Foreign Securities Investment Trends" released by the Financial Supervisory Service on the 13th, foreigners net purchased 3.948 trillion won in listed stocks and net withdrew 1.852 trillion won in listed bonds last month.

In the case of listed bonds, foreigners net purchased 4.622 trillion won, but with 6.474 trillion won redeemed at maturity, the total net withdrawal amounted to 1.852 trillion won. Foreigners had been net investing in domestic listed bonds for 18 consecutive months since December 2020, but recorded their first net withdrawal in June this year. However, they switched back to net investment in July for just one month, and then sold listed bonds again last month. The amount of domestic listed bonds held by foreigners decreased by 1.7 trillion won from the previous month to 231.8 trillion won, accounting for 9.9% of the total listed balance.

While they net invested 800 billion won in government bonds, they net withdrew about 3.2 trillion won in Monetary Stabilization Bonds. At the end of last month, foreigners held government bonds worth 188.4 trillion won, accounting for 81.3%. The amount of special bonds held by foreigners was 42.5 trillion won (18.3%).

During the month of last month, foreigners net purchased 3.948 trillion won in listed stocks. They bought 3.687 trillion won in the KOSPI market and about 261 billion won in the KOSDAQ market.

Foreigners had continued a net selling streak from January to June but turned to net buying starting in July. As of the end of August, foreigners’ holdings of listed stocks amounted to 630.598 trillion won, accounting for 26.2% of the total market capitalization.