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(LEAD) Foreigners turn net buyers of Korean stocks in Oct. on dip-buying

Finance 14:05 November 09, 2022

(ATTN: ADDS more info in last 3 paras)

SEOUL, Nov. 9 (Yonhap) -- Foreign investors turned net buyers of South Korean stocks in October despite continued global monetary tightening as they picked up oversold shares, central bank data showed Wednesday.

Foreigners' stock investment funds logged a net inflow of US$2.49 billion in October, swinging from the previous month's net outflow of $1.65 billion, according to the data from the Bank of Korea (BOK).

The BOK said that foreign investors snapped up oversold shares, especially tech stocks in the local stock markets, buoyed by eased jitters over the British financial chaos.

Foreigners also turned net buyers of local bonds.

Foreigners' bond investment funds expanded $280 million on-month in net value last month, turning around from $1.31 billion and $640 million declines in August and September, respectively.

Their combined investment funds in local securities -- stocks and bonds -- posted a net inflow of $2.77 billion last month, compared with a net outflow of $2.29 billion a month earlier, according to the data.

Meanwhile, the premium on credit default swaps (CDSs) for South Korea's five-year dollar-denominated currency stabilization bonds stood at a monthly average of 61 basis points last month, the highest level since November 2017, when it was at 67 basis points.

A higher premium indicates a higher credit risk. A basis point is one-hundredth of a percentage point.

A BOK official said the current CDS premium is not high enough to worry about considering the figure spiked to as high as 300 basis points in the midst of the previous financial crisis.

A currency trader hangs her jacket on a chair in front of screens showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between the U.S. dollar and the South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul on Nov. 4, 2022, in this Associated Press photo. (Yonhap)


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