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(LEAD) Foreigners' appetite for S. Korean stocks to grow: analysts

All News 16:14 April 20, 2020

(ATTN: ADDS foreign sell-off and index in paras 4-5)

SEOUL, April 20 (Yonhap) -- Foreigners' appetite for South Korean stocks is tipped to grow down the road due to the general election results from last week and the improving coronavirus situation here, analysts said Monday.

Offshore investors turned net buyers Friday, ending their selling spree totaling 14.7 trillion won (US$12.1 trillion) in the March 5-April 16 period amid the coronavirus scare.

Their shift toward a buying mode pushed up the benchmark Korea Composite Stock Price Index (KOSPI) to the highest in six weeks Friday amid eased concerns over the COVID-19 outbreak.

But foreigners sold a net 499.8 billion won worth of local stocks on the main bourse Monday, stoking talks among players of whether their buying will continue.

The country's benchmark index, the KOSPI, shed 0.84 percent to end at 1,898.36 points.

"South Korea's containment of the COVID-19 outbreak makes the strongest case for foreign investors' investment decision," Eugene Investment & Securities researcher Lee Sang-jae said.

On Sunday, new virus infections in South Korea fell to a single digit for the first time since Feb. 18, with 8 new patients added.

Lee said South Korea's quarantine progress in new infections is approximately 34 days ahead of the United States and 14 days ahead of Italy.

An electronic signboard at KB Kookmin Bank in Seoul shows the benchmark Korea Composite Stock Price Index (KOSPI) down 0.84 percent to close at 1,898.36 points on April 20, 2020. (Yonhap)

Hana Financial Investment analyst Choi Yoo-joon said the ruling party's landslide victory in the general elections is likely to accelerate the enforcement of state-led stimulus packages and reform measures.

Of the 300 seats up for grabs, the ruling Democratic Party secured 180 seats or 60 percent.

In the election period, the ruling party had pledged to boost the manufacturing sector, including chips, autos, parts and bio, foreigners' traditional favorites.

Meanwhile, experts picked South Korea's weak economic fundamentals as a potential threat to foreign investors' appetite, as the coronavirus pandemic has crippled industrial output, consumer spending and the job market in Asia's fourth-largest economy.

South Korea lost about 195,000 jobs in March, marking the sharpest monthly decline since May 2009, Statistics Korea data showed.

According to a survey conducted by Yonhap Infomax, South Korea's economy in January-March is expected to contract 1.81 percent on-quarter.

jwc@yna.co.kr
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