$21.65 Billion in Foreign Funds Exited in July... Net Outflows Continue for 6th Consecutive Month

Foreign investors maintained a net selling stance in South Korean stock and bond markets for the sixth consecutive month last month.

According to the "International Financial and Foreign Exchange Market Trends" statistics released by the Bank of Korea today (August 13), $21.65 billion in foreign securities (stocks and bonds) investment funds flowed out on a net basis in July.

A net outflow means that the amount of foreign investment funds that left the South Korean securities market exceeded the amount that came in.

Foreign funds have been recording net outflows since February.

The scale of net outflows in July decreased compared to June ($30.72 billion).

By type of security, $20.70 billion in stock funds flowed out on a net basis last month.

This marks seven consecutive months of net outflows starting from January of this year.

However, the scale of the outflow decreased compared to June, when a record high of $32.37 billion left the market.

An official from the Bank of Korea explained, "Stock funds experienced a net outflow due to escalating geopolitical tensions in the Middle East and cautious sentiment surrounding global artificial intelligence (AI) investments, but the scale of the outflow narrowed as rebalancing selling pressure eased following domestic stock price corrections."

Bond funds also saw an outflow of $960 million.

After maintaining net inflows for three months starting from April of this year, bond funds turned to a net outflow last month.

An official from the Bank of Korea stated, "Bond funds shifted to a net outflow due to factors such as the widening reversal of incentives for short-term arbitrage trading."

The credit default swap (CDS) premium on South Korean Treasury bonds (based on 5-year Foreign Exchange Stabilization Fund bonds) remained at a monthly average of 23 bps (1 bp = 0.01 percentage points), the same level as the previous month.

The fluctuation range and rate of the won-dollar exchange rate (compared to the previous day) during July were 8.0 won and 0.53%, respectively, increasing from the previous month (7.6 won and 0.50%).

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.