Foreign Investors Pull Record Amount of Capital from Korean Stock Market

Foreign investors engaged in profit-taking in the domestic stock market last month, resulting in the largest-ever net outflow of dollar-denominated funds.

According to the Trends in International Financial and Foreign Exchange Markets report released by the Bank of Korea today (July 14), there was a net outflow of $32.37 billion in foreign stock investment funds in June.

This figure surpasses the $31.83 billion net outflow recorded in May, marking the largest scale on record.

Foreign stock investment funds have seen net outflows for six consecutive months since January of this year. The cumulative net outflow for the first half of this year reached $110.21 billion, which is approximately 170.6 trillion won as of the end of June.

This is more than 15 times the total annual net outflow of $7.07 billion recorded last year.

Combined investment funds for stocks and bonds saw a net outflow of $30.72 billion in June.

This is the second-largest scale on record, following the $36.55 billion net outflow in March.

With net outflows continuing for five consecutive months since February, the cumulative net outflow for the first half of this year stood at $100.93 billion, or approximately 156.3 trillion won.

In 2024, there was a net inflow of $20.77 billion, and last year, there was an annual net inflow of $42.06 billion.

Bond funds recorded a net inflow of $1.65 billion in June, continuing a trend of net inflows for three consecutive months.

The cumulative net inflow for the first half of the year is $9.28 billion.

The Bank of Korea explained, "The net outflow of stock funds in June expanded due to dampened investor sentiment stemming from caution regarding global AI investments, as well as the rebalancing of domestic stock holdings following the recent rise in stock prices."

External foreign currency borrowing conditions in June improved compared to the previous month, following the signing of a peace memorandum of understanding (MOU) between the United States and Iran.

The credit default swap (CDS) premium for South Korean government bonds, based on 5-year Foreign Exchange Stabilization Fund bonds, averaged 23 basis points in June, down 2 basis points from the previous month (25 basis points).

In June, the daily average fluctuation range and the day-to-day volatility rate of the won-dollar exchange rate increased to 7.6 won and 0.50%, respectively, compared to the previous month (6.6 won and 0.45%).

Reported by Kim Minjeong | Video by Kim Na-on | Graphics by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.