Foreigners Only Net Buyers in KOSPI in April... Impact of Interest Rate Cut Delay Expectations

Financial Supervisory Service Announces Foreign Securities Investment Trends for April 2024
Foreigners Record 2.626 Trillion KRW in Stock Investment in April
Decrease of 17.7 Trillion KRW Compared to March
Bonds Show Net Investment After One Month

Foreign investors continued their six-month streak of net buying in the domestic stock market last month, purchasing a net total of 2.626 trillion KRW. They recorded net buying only in the Korea Composite Stock Price Index (KOSPI) market, while net selling was seen in the KOSDAQ market. In the bond market, foreign investors switched to net investment after one month.

According to the "April Foreign Securities Investment Trends" released by the Financial Supervisory Service on the 8th, foreign stock investment in the first quarter of this year totaled 2.626 trillion KRW. This was a decrease of 17.7 trillion KRW compared to March, which had recorded the highest level since the related statistics began to be compiled. This decline is interpreted as a result of dampened risk asset investment sentiment due to expectations that the U.S. Federal Reserve's (Fed) interest rate cut timing will be delayed beyond initial forecasts.

Last month, foreign investors net purchased listed stocks worth 2.626 trillion KRW, continuing their six-month streak of net buying. They net purchased 3.649 trillion KRW in the KOSPI market but net sold 1.024 trillion KRW in the KOSDAQ market.

By country, the United States (3.5 trillion KRW) and Ireland (300 billion KRW) were net buyers, while Germany and Canada were net sellers with 400 billion KRW and 700 billion KRW, respectively.

As of the end of March, foreign investors held listed stocks worth 802.5 trillion KRW, accounting for 28.9% of the total market capitalization. The U.S. held 321.1 trillion KRW, representing 40.0% of the total foreign holdings. Europe accounted for 247.2 trillion KRW (30.8%), and Asia 119.3 trillion KRW (14.9%).

In the bond market, foreign investors switched to net redemption after one month. Last month, they net purchased listed bonds worth 5.42 trillion KRW and received 2.847 trillion KRW in matured repayments, resulting in a net redemption of 2.573 trillion KRW. The total holdings of listed bonds by foreign investors stood at 247.2 trillion KRW, which is about 9.7% of the outstanding listed bonds.