Foreign Investors Sell 12.1 Trillion Won in South Korean Stocks but Buy 593.7 Billion Won in ETFs

Foreign investors were net sellers on the main bourse in eight of the 12 trading sessions through the week ending July 16, selling a net 12.1 trillion won (US$8.12 billion) worth of shares on South Korea's main stock market through Thursday this month, Yonhap reported Sunday.

They also offloaded a net 338.1 billion won on the tech-heavy secondary market, according to data from the Korea Exchange. The market remained closed Friday for Constitution Day.

In contrast, foreign investors purchased a net 593.7 billion won worth of exchange-traded funds during the period, recording net buys in 10 of the 12 sessions. The KODEX Leverage ETF, which tracks twice the daily performance of the benchmark KOSPI, drew the largest inflows at 195 billion won, followed by the KODEX 200 ETF at 180.6 billion won.

Foreign investors instead reduced holdings in single-stock leveraged products.

They sold a net 79 billion won of the SK hynix leveraged ETF managed by Samsung Asset Management and 46.4 billion won of the corresponding product from Mirae Asset Global Investments. "Foreigners apparently invested in different ETFs to reduce risk in their respective portfolios rather than betting on a particular market direction," a market watcher said.

Last week the government raised the minimum deposit requirement for investors in single-stock leveraged ETFs to 30 million won from 10 million won and allowed trading in lots of 20 shares.