In brief
In September, foreign investors dumped 19.11 trillion won of South Korean equities, with the KOSPI hit hardest. Their disengagement extended to the domestic bond market, where they net sold 7.57 trillion won of listed bonds. UBS cut its KOSPI target to 8,000 points amid a stronger won.
Foreign investors turned into aggressive net sellers of South Korean stocks last month, dumping a total of 19.11 trillion won (about $14.3 billion) of listed shares, according to data from the Financial Supervisory Service released by Xinhua.
This sell‑off was heavily concentrated on the main KOSPI market, where foreigners net sold 17.45 trillion won. Their exports from the tech‑heavy KOSDAQ market added another 1.66 trillion won, leaving foreign holdings of local stocks at 2,296.0 trillion won by the end of September. Those holdings represented 34.8 percent of the country’s total market capitalization.
Equity Sell‑off
By country, investors from the United Kingdom were the top sellers in September, liquidating a net 6.9 trillion won, followed by the United States with 3.9 trillion won, a figure reported by Yonhap News.
Amid the outflows, UBS announced it was lowering its 12‑month KOSPI target to 8,000 points from a prior 8,800, citing the impact of a stronger won on the market. The cut signals heightened uncertainty surrounding the index’s trajectory.
Bond Market Exit
In the domestic bond market, foreign investors continued a net withdrawal for a second straight month. They bought a net 127.0 billion won of local listed bonds last month, but the combined effect of maturing debts worth 7.70 trillion won and other factors translated into a net disinvestment of 7.57 trillion won. Foreign ownership of listed bonds totaled 322.9 trillion won at the close of September, accounting for 11.2 percent of all listed bonds in the country.
Analysts note that these figures mark an unprecedented scale of foreign capital leaving the Korean equity and bond markets. The sustained outgrowing on the front of stocks and the continued pullback from bonds suggest a tightening of foreign appetite for South Korean assets.
While the data clearly document the magnitude of the sell‑off, the underlying causes and how the trend might evolve remain uncertain. Questions about whether the departure reflects short‑term market volatility, a shift in risk appetite, or longer‑term structural changes in the Korean economy are still unresolved, according to the outlets reporting on the transaction details.
