Foreign investors and South Korean stocks

Foreign investors snapped up a record amount of South Korean stocks on a monthly basis in January amid signs of recovery in the U.S. economy and easing global uncertainties, the financial watchdog said Thursday.

Overseas investors bought a net 6.2 trillion won (US$ 5.5 billion) of local stocks last month, compared with a net purchase of 113.4 billion won in December, according to the Financial Supervisory Service (FSS).

The figure marks a new record high for monthly purchases. Overseas investors offloaded 9.6 trillion won worth of shares in 2011 amid the first-ever U.S. credit downgrade on Aug. 5 and lingering eurozone debt woes.

The FSS said that both European and U.S. investors snapped up massive amounts of local stocks in January, with their net purchases totaling 3 trillion won and 1.7 trillion won, respectively.

“There were improvements in U.S. economic data and overall external risks eased. It seems overseas investors expanded their investment in South Korea which shows relatively healthy economic fundamentals, while readjusting their portfolio,” said an official at the FSS.

By country, British investors were the biggest investor group with purchases amounting to 2.1 trillion won, followed by U.S. investors with 1.7 trillion won. Spanish investors, however, scaled back their stock holdings by 134.8 billion won.

Foreign investors’ stock holdings reached 380.8 trillion won, accounting for 30.8 percent of total stock ownership on the local bourse, according to the FSS.

Meanwhile, overseas investors’ net bond investments reached 1.6 trillion won last month, marking a sharp turnaround after decreasing 3.9 trillion won in December.

Investors from Hong Kong led the investments, with their net investment reaching 546.4 billion won, trailed by investors from Bermuda with 421 billion won. Thai investors were the biggest sellers, decreasing their net investment by 191.2 billion won.

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