Stock Funds See Net Inflow of Only $180 Million
Bond Funds Turn to Net Outflow After 7 Months
Profit-Taking and Bond Maturities Drive the Shift
Foreign capital in the domestic securities market shifted to a net outflow for the first time in four months. The net inflow of funds into the stock market decreased significantly due to profit-taking, while bond funds also turned to a net outflow after seven months, mainly because of maturing redemptions.
According to the "Trends in International Financial and Foreign Exchange Markets After August 2025" released by the Bank of Korea on September 12, foreign funds in the domestic stock and bond markets recorded a net outflow of 600 million dollars last month. The net inflow trend that had continued since May was reversed after four months.
Stock funds saw a net inflow of 180 million dollars. After a net outflow of 9.33 billion dollars in April, the net inflow increased to 1.45 billion dollars in May, 2.27 billion dollars in June, and 2.44 billion dollars in July, but the scale of net inflow slowed significantly this time. A Bank of Korea official explained, "This was due to profit-taking sales in certain sectors such as semiconductors."
Bond funds recorded a net outflow of 770 million dollars. After turning to a net inflow of 3.54 billion dollars in February, bond funds shifted to a net outflow for the first time in seven months. This was attributed to a decrease in arbitrage opportunities as well as maturing redemptions, which led to capital outflows.
The won-dollar exchange rate stood at 1,390.1 won at the end of August, up slightly from 1,387.0 won at the end of July. A Bank of Korea official explained, "Despite expectations of a rate cut by the Federal Reserve due to weaker U.S. employment data, the exchange rate fluctuated around the 1,390 won level as overseas investments by residents continued and foreign securities funds turned to a net outflow." The daily volatility rate in August was 0.42%, up from 0.37% in the previous month.
A Bank of Korea official stated, "In the international financial market, investor sentiment remains generally positive as expectations for a Federal Reserve rate cut have strengthened," adding, "In the domestic foreign exchange sector, the external borrowing conditions for domestic banks continue to remain stable."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
