Foreign ownership in the South Korean market reached its highest level in five years and eight months in December due to a market rally. Foreigners purchased a net 3.5 trillion won worth of local shares, increasing their stockholdings to 32.9 percent of total market capitalization, the highest since April 2020.
Data from the Financial Supervisory Service revealed that foreign ownership was at 29.6 percent in November, down from 31.5 percent in April 2020. The Korea Center for International Finance reported that foreign investors bought a net 4.5 trillion won worth of shares in the electronics sector in December, with significant investments in SK hynix and Samsung Electronics.
Foreign ownership of SK hynix rose to 53.8 percent in December, up from 53.2 percent the previous month. Similarly, foreign holdings in Samsung Electronics increased to 52.3 percent from 52.2 percent during the same period. In the bond market, foreign investors purchased a net 8.8 trillion won worth of bonds in December.
The rise in foreign investment was attributed to expectations of strong global demand for memory chips benefiting South Korean chipmakers. Additionally, the Seoul government’s initiatives to reform the stock market and enhance corporate value played a role in attracting foreign investors.
South Korea’s benchmark stock index closed at 4,214.17 on December 30, marking a 75.7 percent increase from the beginning of the year. On the same day, South Korean stocks surged over 2 percent to reach an all-time high, driven by substantial gains in large-cap semiconductor shares, while the local currency weakened against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) closed at 4,309.63, surpassing the 4,300 level for the first time.
