'Value-Up Effect'... Foreigners Bought 7.4 Trillion Won of Korean Stocks in February

Record Highest Net Purchase on KOSPI in 11 Years

Foreign investors net purchased 7.4 trillion KRW worth of domestic stocks last month. This is the largest amount in 11 years since September 2013. It is interpreted that foreign investors' sentiment toward the domestic stock market expanded due to expectations for the 'Corporate Value-Up Program' announced by the Financial Services Commission last month.

According to the 'February Foreign Securities Investment Trends' announced by the Financial Supervisory Service on the 12th, foreign investors net purchased 7.375 trillion KRW (based on transaction amount) of listed stocks in February.

Specifically, foreign investors net purchased 7.276 trillion KRW in the KOSPI market and 100 billion KRW in the KOSDAQ market. Following net purchases of 3.3 trillion KRW in November last year, 3.146 trillion KRW in December, and 3.353 trillion KRW in January this year, they recorded net purchases for four consecutive months.

In particular, the net purchase amount in February is the largest in 11 years since September 2013 (8.3 trillion KRW). Foreign investors continued their buying trend in low PBR (price-to-book ratio) stocks. This reflects expectations for the Value-Up Program.

By country, the United Kingdom (3.6 trillion KRW) and the United States (2.8 trillion KRW) recorded net purchases, while the Cayman Islands (-700 billion KRW) and Malta (-200 billion KRW) recorded net sales.

As of the end of last month, foreign investors' holdings of listed stocks amounted to 762 trillion KRW, accounting for 28.1% of the total market capitalization.

[Image source=Yonhap News]

Meanwhile, foreign investors also recorded net investments in the bond market for two consecutive months. Last month, they net invested 3.457 trillion KRW in listed bonds. In February, foreign investors net purchased 4.965 trillion KRW of listed bonds and received 1.508 trillion KRW in matured repayments. The scale of foreign investors' holdings of listed bonds is 248.8 trillion KRW, which is about 9.8% of the outstanding amount.