Foreign Investors Achieve Highest Net Purchases Of South Korean Stocks In Over A Year

Foreign investors made significant net purchases on South Korea's main stock index last month, marking the highest level in 17 months. According to Yonhap, data from the Korea Exchange (KRX) revealed that offshore investors bought stocks worth 6.28 trillion won (US$4.52 billion) on the Korea Composite Stock Price Index (KOSPI) in July. This was the largest monthly net buying since February 2023, when it reached 7.858 trillion won.

The increase in foreign buying is largely due to optimism surrounding new government measures aimed at stimulating the stock market and potential tariff agreements between South Korea and the United States. The news of Samsung Electronics securing a major supply deal with Tesla also boosted investor confidence.

Samsung Electronics emerged as the most popular choice among foreign investors in July. They purchased a net total of 3.49 trillion won worth of Samsung shares, which represented 56 percent of all foreign net buying on the KOSPI during that month.

Hanwha Ocean, a leading shipbuilder, was another favourite among overseas investors. It saw net purchases amounting to 858 billion won, driven by expectations of enhanced cooperation with the U.S.

The strong foreign investment activity contributed to a 5.7 percent rise in the KOSPI last month. This marked a positive trend for the index, supported by increased interest from international investors.

In August 2024, offshore investors began a trend of net selling that persisted for nine months until April. However, this changed in May when they shifted back to net buying, purchasing around 1 trillion won worth of stocks.

This positive momentum continued for three consecutive months through July, indicating renewed interest and confidence among foreign investors in South Korea's stock market.

The July net purchase amount was also significantly higher than June's figure of 2.69 trillion won, more than doubling it by 2.3 times.

The recent surge in foreign investment highlights growing optimism about South Korea's economic prospects and its ability to attract international capital through strategic partnerships and policy initiatives.

With inputs from WAM