Foreign investors turned net sellers in South Korea’s stock market in August, offloading Samsung Electronics Co., internet giant Naver Corp. and shipbuilder Hanwha Ocean Co., while picking up mobile platform giant Kakao Corp. and Hyundai Motor Co.
After the Kospi index rallied to its four-year peak of 3,242.17 points on Aug. 12, foreigners reversed course, snapping their three-month buying spree.
They dumped a net 1.80 trillion won ($1.3 billion) worth of stocks on South Korea’s main bourse in August, according to the Korea Exchange on Monday.
It marked the first time since April that monthly sales by offshore investors outstripped their net purchases of Kospi-listed stocks.
Foreign investors’ net selling on the Kospi in August is as follows:
In May, offshore investors ended their nine-month selling streak on Kospi-listed stocks, turning net buyers with 1.17 trillion won worth of net purchases.
The shift came as political uncertainty eased following the removal of former President Yoon Suk Yeol from office, triggered by his ill-fated declaration of martial law.
Since President Lee Jae Myung took office in early June, foreign investors have ramped up their holdings of Korean stocks. They welcomed Lee’s campaign pledge to implement stock market-friendly measures to drive the Kospi index up to 5,000 points, a milestone yet to be reached in the history of Korean stock market.
They snapped up a net 2.69 trillion won and 6.28 trillion won worth of stocks on the Kospi market in June and July, respectively.
For the period from June to July, the Kospi gained 26.94%, spiking to 3,245.44, its highest level since June 2021.
TAX REFORM, SOFTER WON CURRENCY
However, the bellwether index fell 1.83% in August to 3,186.01 as of the end of August following the government’s announcement of tax reforms aimed at collecting more taxes from corporations and even individual investors, coupled with a softening Korean won.
The won currency weakened to 1,389.8 against the dollar at the end of August, compared with 1,352.9 on June 26. A softer Korean won erode offshore investors’ gains in terms of the US currency.
Foreign investors’ net buying on the Kospi in August is as follows:
Bucking the trend, Kakao Corp. soared 7.76% in August, fueled by foreign investors’ net purchases of 488.9 billion won of the stock.
Investor reacted positively to the company’s revamp of the KakaoTalk messenger platform this month, along with the planned launch of Kakao’s AI agent service in November.
NET BUYING OF TARIFF-HIT HYUNDAI MOTOR
They also bet that Hyundai Motor Group’s automakers and parts suppliers will weather the impact of US tariff hikes by boosting competitiveness and cutting costs through the deployment of robots in their production lines.
Among shipbuilders, offshore investors rebalanced their portfolio, buying a net 205.4 billion won worth of Samsung Heavy Industries Co. Instead, they sold a net 307.2 billion won worth of Hanwha Ocean Co.
Samsung Heavy has underperformed relative to its domestic peer Hanwha Ocean Co. this year, rising of 88.5% this year as of the end of August, compared with Hanwha’s gain of 199.87% during the same period.
By Kyung-Woo Han
case@hankyung.com
Yeonhee Kim edited this article.
