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Foreigners' stake in Korean stocks hits 7-month low: data

All News 09:18 October 21, 2014

SEOUL, Oct. 21 (Yonhap) -- Stock ownership by foreign investors on South Korea's bourse fell to the lowest level in seven months as they continued to unload heavyweights such as tech and auto shares amid concerns over a slowdown in the global economy and currency volatility, data showed Tuesday.

Overseas investors held a combined 34.57 percent of local shares listed on the main bourse, worth 392.03 trillion won (US$371 billion) as of Friday, the lowest since the 34.43 percent tallied on March 25, according to the data compiled by the Korea Financial Investment Association (KOFIA).

Foreign ownership of local stocks has been above the 35 percent mark between April and late September but fell to below the threshold as they went on massive selling binges in the face of the dollar's strength, a slowdown in the global economy and downbeat corporate earnings.

For the past month, foreign investors sold a net 3.2 trillion won worth of local stocks, with their massive sell-offs sending the country's key stock index, the KOSPI, sharply lower to an eight-month low. For the one-month period, the index shed 6.4 percent.

In contrast, foreign investors scooped up stocks traded on the secondary Kosdaq market, with their ownership reaching an all-time high of 11.04 percent Friday.

Largely thanks to their strong buying, the Kosdaq index shed a smaller margin of 3.2 percent for the past month.

Foreign investors have scurried to small cap shares as bigger players suffered a lackluster performance in the face of weak earnings and currency volatility, analysts said.

"Foreign selling may weaken down the road on expectations over extended easing policies in major economies," said Lee Ahram, an analyst at NH Nonghyup Securities. "Also, the pace of the dollar's strength may ease, which would help decelerate foreign selling here."

sam@yna.co.kr
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