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Foreign selling spree longest in 4 yrs on lingering uncertainties

Finance 17:43 December 02, 2019

By Chung Joo-won

SEOUL, Dec. 2 (Yonhap) -- Foreign investors continued to dump South Korean stocks on Monday, extending their selling spree to an 18th consecutive session, the longest in four years, data showed Monday, as they attempt to rebalance their asset portfolios amid the long-stalled Sino-American trade dispute and worries over an economic slump.

As of 5:04 p.m., foreigners had sold a net 4.3 trillion won (US$3.6 billion) worth of local stocks between Nov. 7 and Dec. 2, the longest period of selling in four years, according to the data compiled by the Korea Exchange (KRX).

Their longest-ever selling binge lasted for 22 consecutive days, from Dec. 2, 2015, to Jan. 5, 2016, during which a net 3.7 trillion won worth of stocks was dumped.

This photo taken Dec. 2, 2019, shows KEB Hana Bank's dealing room in central Seoul. (Yonhap)

Analysts said the protracted Sino-American trade row and weaker than expected economic data have sapped foreigners' appetite for stocks in Asia's fourth-largest economy.

South Korea's outbound shipments tumbled 14.5 percent in November, falling for a 12th straight month. Exports of semiconductors, a key item for South Korea, remained weak, nose-diving 30.8 percent to $7.39 billion.

Also, the economy is widely expected to show the weakest performance this year in four years in the face of an extended slump in exports and still stagnant domestic demand.

"Foreign investors have been selling stocks at a remarkably fast pace over the past four months," said Park Sang-hyun, an analyst at HI Investment & Securities. "The November sell-off outpaced the previous one in May, when the local stock market tumbled on fears that the U.S.-China trade negotiations may fall through," he said.

Recent U.S. legislation supporting pro-democracy protesters in Hong Kong created a last-minute hurdle in the U.S.-China trade negotiations, casting a cloud on the prospect of an early trade deal between the world's largest economies -- also Korea's two biggest trading partners.

"The massive foreign sell-offs were influenced by the Hong Kong human rights act and entailing uncertainties, as well as the British general election in December," said Choi Yoo-joon, an analyst at Shinhan Financial Investment.

Foreign stock sell-offs reached 221 billion won in October, 1.32 trillion won in September, 2.59 trillion won in August and 1.92 trillion won in July, KRX data showed.


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