Foreign investments in the domestic stock market decreased for the eighth consecutive month in March of this year. Investment in listed bonds significantly increased for the second consecutive month. Although the total amount of foreign investment increased, the wealth gap between investment products widened.
The Financial Supervisory Service announced on the 18th that foreign net investment in the domestic capital market reached 4.237 trillion won last month in its report titled 'Foreign securities investment trends as of March 2025.'
Foreigners are reducing investments in the domestic stock market while significantly increasing investments in listed bonds. This suggests that foreigners are attracted to the stability of bonds over domestic stocks.
Last month, foreign investments in listed shares resulted in a net sell-off of 1.637 trillion won. For eight consecutive months since August of last year, funds have flowed out. Consequently, the proportion of foreigners in domestic listed stocks also decreased. Last month, the ratio of foreigners in the domestic stock market was 27.3%, down 2.8% from 30.1% in July of last year.
By country, Singapore led the decline in foreign investment, selling off 2.601 trillion won. Norway followed with a net sell-off of 626 billion won, and the Netherlands with 219 billion won. In contrast, British investors made a net purchase of 652 billion won, with the U.S. purchasing 574 billion won and the Cayman Islands 505 billion won.
Funds that escaped from the stock market flowed into the domestic bond market. Last month, foreigners net purchased bonds worth 14.309 trillion won and redeemed 8.435 trillion won in maturities, showing an investment scale of 5.874 trillion won. Cumulatively, foreign funds accounted for 10.6% of the listed bond balance, totaling 278.6 trillion won.
By type of bond, 4.6 trillion won was net purchased in Government Bonds and 1.2 trillion won in currency stabilization bonds. Based on remaining maturity, net purchases were 6 trillion won for bonds with more than five years remaining, 800 billion won for 1 to 5 years, while 900 billion won was net withdrawn from bonds under one year.