Foreign Investors Net Sell Nearly $110 Billion of South Korean Stocks Year-to-Date, Increasing Retail Investor Selling Pressure

BlockBeats News, July 14th. Foreign investors have withdrawn nearly $110 billion from the South Korean stock market so far this year, setting a new record high. The main reason is to avoid the rapid rise of the Korean stock market, which has caused imbalance in their investment portfolio allocations. This has led to domestic retail investors in Korea taking on most of the buying pressure. Following a net purchase of ₩42.4 trillion in June, Korean retail investors have accumulated a net purchase of ₩13.2 trillion in KOSPI stocks this month. As of July 14th, the financing balance used by retail investors to invest in KOSPI stocks amounted to ₩28 trillion, which hit a historical high of ₩29.8 trillion on June 24th.

Alexander Redman, Chief Equity Strategist at Lyon Securities in France, said, "South Korea remains the most overweight market in our portfolio, but I have started to reduce my holdings. What concerns me is that the market is currently dominated by retail investors who are heavily engaged in margin trading." (FXStreet)