SEOUL, July 31 (AJP) -Foreign investors sold nearly 50 trillion won ($31.2 billion) worth of South Korean equities in June, yet their ownership of the market climbed to 36.4 percent — the highest in months — suggesting the six-month selling streak has been more a portfolio reshuffle than a broad retreat as soaring share prices boosted the value of remaining holdings.
Foreign investors recorded a net withdrawal of 44.86 trillion won from South Korea's listed securities in June, as heavy stock sales outweighed continued buying of government bonds, according to data released Friday by the Financial Supervisory Service (FSS).
They sold a net 49.34 trillion won of listed equities, extending their selling streak to a sixth consecutive month. Net sales reached 50.98 trillion won on the benchmark Kospi, partly offset by net purchases of 1.64 trillion won on the Kosdaq market.
Combined equity sales reached 163.56 trillion won during the first six months of the year, while total net outflows from stocks and bonds amounted to 149.78 trillion won, widening from 38.23 trillion won in May to 44.86 trillion won in June.
Despite the persistent selling, the market value of foreign investors' Korean equity holdings rose by 56.33 trillion won from a month earlier to 2,908.64 trillion won, lifting their ownership share to 36.4 percent of the market from 35.3 percent in May and sharply from 30.8 percent at the end of December.
European investors led the June selling, unloading a net 30.76 trillion won of shares, followed by investors from the Americas with net sales of 26.96 trillion won. By country, British investors sold a net 32.20 trillion won, while U.S. investors disposed of 23.18 trillion won and Luxembourg-based investors sold 4.27 trillion won.
Buying was concentrated among Cayman Islands-based investors, who purchased a net 7.27 trillion won of shares, followed by investors from France with 6.11 trillion won and Hong Kong with 5.27 trillion won.
U.S. investors remained the largest foreign shareholders, holding Korean stocks worth 1,222.34 trillion won, equivalent to 42 percent of all foreign-owned equities.
The bond market told a different story. Overseas investors remained net buyers for a third straight month, recording net investment of 4.48 trillion won after purchasing 13.90 trillion won of listed bonds and receiving 9.42 trillion won through maturities and repayments.
Government bonds attracted net inflows of 4.73 trillion won, while special-purpose and monetary stabilization bonds posted modest outflows.
Foreign investors favored longer-dated debt, buying a net 7.86 trillion won of bonds with one to five years remaining to maturity and 6.52 trillion won of bonds maturing in more than five years, while reducing holdings of debt maturing within one year by 9.90 trillion won.
Foreign holdings of listed bonds edged up by 1.21 trillion won from May to 334.79 trillion won, equivalent to 11.8 percent of the outstanding listed bond market. Combined foreign holdings of Korean listed stocks and bonds stood at 3,243.43 trillion won at the end of June.
The FSS added its figures are compiled on a settlement basis, unlike Korea Exchange data, which are based on trade execution dates.
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