Foreigners return to Kospi on stronger won
According to data provided by the country's main bourse operator, Korea Exchange, offshore investors net bought shares amounting to 1.47 trillion won on the Kospi in May.
Outside of May 2, when foreigners offloaded shares worth 167 billion won, they were net buyers on the market for eight consecutive trading days from May 7 to 16. The stock market closed on May 1 and May 3-6 because of public holidays.
The buying spree marks a contrast from foreign investors being net sellers on the Kospi for nine straight months since August, offloading a total of 34.15 trillion won. In April, foreign investors dumped shares worth 9.35 trillion won on the bourse, setting a new high on the exodus.
The turnaround comes on the back of the won's recent appreciation against the dollar. After weakening to 1,479 won to the US dollar on April 8, the local currency strengthened against the greenback to the 1,400 won level.
A stronger won can be appealing for foreign investors to put their money in won-denominated assets, expecting a gain from further appreciation of the won.
Chip giant SK hynix was the top-purchased stock for foreign investors this month, as they raked in 1.29 trillion won of shares, followed by energy solutions providers Doosan Enerbility and HD Hyundai Electric at 273 billion won and 147 billion won, respectively.
Yet, foreign hands dumped their holdings of tech behemoth Samsung Electronics, net selling shares worth 559 billion won this month. With the sell-off, foreign ownership of Samsung Electronics' shares dropped to 49.7 percent from 56.5 percent in July.
'Foreign investors are continuing the net buying on the back of the improved investor sentiment in the global stock markets,' said analyst Lee Kyung-min at Daishin Securities. 'The anticipation of the won appreciation led to the net buying of foreign investors. The foreigners' move will set the tone for the Kospi's gain.'
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