Foreigners Keep Dumping Korean Stocks
16 May, 2020
The Korea Composite Stock Price Index has risen 33 percent in only two months after the initial coronavirus shock. The KOSPI is currently close to surpassing 1,950 points again, but foreign investors have yet to come back.
The focus of market watchers is how long the bargain-hunting spree among small domestic investors will last.
On Thursday, the KOSPI closed down 0.8 percent at 1,924.96 points. After surging 11 percent last month, it has fallen 1.2 percent so far in May.
Since falling to the cheapest point so far this season or 1,457.64 points in late March, the KOSPI has been seen continued selling by foreign investors. In line with the Korea Exchange, foreigners shed W12.56 trillion worth of Korean stocks in March and W4.1 trillion in April (US$1=W1,228). So far this month they sold W2.34 trillion.
The slack was adopted by individual investors, who bought W11.29 trillion worth of stocks in March, W3.18 trillion in April, and more than W3 trillion so far this month.
Since March, foreigners bought Korean stocks for only five trading days.
The main reason may be the coronavirus epidemic. The rate of infection has eased in a few Parts of asia including China, but continues to rage on in the U.S. and Europe. Jitters remain high over a global economical slump, prompting investors to flock to safe-haven assets such as U.S. dollars, bonds and gold.
As lockdowns continue in the U.S. and Europe, investors are reluctant to purchase export-dependent emerging economies.
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