Since the beginning of this month, over 1 trillion won has flowed into U.S.-listed exchange-traded funds (ETFs) betting on the rise of the Korean stock market. This is the highest level in one and a half years.
According to Bloomberg and the financial investment industry on the 15th, 772.85 million dollars (about 1.07 trillion won) had a net inflow into the 'iShares MSCI Korea' (EWY) listed on the New York Stock Exchange from the 1st to the 10th of this month. This is the largest monthly net inflow since January 2023.
iShares MSCI Korea is a passive fund that invests in the Korean market. It is operated by BlackRock and indirectly invests in large and mid-cap stocks listed on our exchange. It tracks the 'MSCI Korea 25/50' index, with investment weights of 21% for Samsung Electronics and 10% for SK hynix.
The iShares MSCI Korea ETF experienced a net outflow of funds from August last year to April of this year but shifted to a net inflow in May (27.446 million dollars). The buying momentum has intensified this month.
The market believes that expectations for protecting shareholder rights through amendments to the Commercial Act and resolving the Korea discount (undervaluation) have increased investor sentiment towards our market since the launch of the new government.
The KOSPI index has risen 10.4% over the past month. On the 12th, it reached 2934.31 during intraday trading, approaching the 3000 mark.
In particular, foreign investors show strong buying activity in large-cap stocks. Since the beginning of this month, it has been reported that foreign investors purchased 858.5 billion won worth of Samsung Electronics and 1.1744 trillion won worth of SK hynix stocks.
Foreign investors have maintained a net buying trend in the securities market for eight consecutive trading days this month. Notably, even on the 13th, when tensions in the Middle East peaked due to Israel's airstrike on Iran, a net purchase of 121 billion won was recorded.