Recently, the KOSPI has repeatedly hit a record high, and a "Buy Korea" trend among foreign investors is gathering pace. As a result, the market cap of KOSPI shares held by foreigners has topped 1,000 trillion won for the first time.
According to the Korea Exchange (KRX) and others on the 26th, as of the 24th of this month, the total market capitalization of the KOSPI was 3,243 trillion won, of which foreign investors held 1,125 trillion won. The foreign ownership ratio was 34.71%, surging by about 500 trillion won in roughly 10 months from the end of last year (632 trillion won, 32.21%).
In particular, in October alone, foreigners' market cap holdings increased by 425 trillion won. This is interpreted as the result of active foreign buying and a concurrent rise in the share prices of major stocks they hold.
By market cap held by foreigners, ▲ Samsung Electronics 305 trillion won (ownership ratio 52.22%) ▲ SK hynix 204 trillion won (54.99%).
Experts analyzed that the foreign buying was driven by expectations for an improvement in the semiconductor cycle and market-friendly government policies.
Noh Dong-gil, a researcher at Shinhan Investment & Securities, said, "With a weaker exchange rate and an earnings-driven market, large-cap semiconductor stocks such as Samsung Electronics and SK hynix moved, and flows shifted."
However, some say foreigners' buying could slow going forward. Lee Kyung-min, a researcher at Daishin Securities Co., said, "Despite expectations for a conclusion to trade negotiations with the United States, concerns over $350 billion (about 504 trillion won) in investment have increased exchange rate volatility," adding, "Whether the won-dollar exchange rate stabilizes lower against the U.S. dollar depending on the outcome of the talks will determine the flow of foreign funds."