Foreigners’ ownership of shares on the Korea Composite Stock Price Index has fallen to the lowest level in six years amid a frantic selloff.
According to the Korea Exchange on Sunday, foreign investors now own W666 trillion worth of shares or 31.86 percent of KOSPI’s total market cap (US$1=W1,232). The previous low was 31.77 percent in 2016.
Foreign ownership soared to 40 percent at the onset of the coronavirus pandemic in March of 2020, but increasing economic jitters prompted retail investors to dump their shares, which were snapped up by foreigners on a bargain hunt. The KOSPI sank to as low as 1,430 points at the time.
But retail investors returned to the market later, causing foreign investors’ ownership proportion to drop, and more recently foreigners have been selling Korean stocks to park them in “safe havens” amid jitters over a U.S. rate hike, war in Ukraine and surging raw materials costs.
From Feb. 24, when the Russian invasion of Ukraine began, until last Friday, foreign investors sold off W4.3 trillion worth of Korean stocks.
Shares in Samsung Electronics, where foreigners account for about half of all stakeholders, have been dropping, hovering around W70,000 for more than a week.
Lee Kyung-min at Daeshin Securities said, “The KOSPI is expected to bottom out when it reaches the 2,500-point level and the Fed announces its rate hike.”
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