Foreign investors set a new record by selling 44.71 trillion won ($29.66 billion) worth of South Korean stocks in May, surpassing the previous high set in March. This marked 16 consecutive trading sessions of foreign selling, the longest streak since February 2009 during the global financial crisis. In contrast, retail investors bought a record 36.09 trillion won worth of stocks during the same period.
Market analysts attributed the foreign sell-off to profit-taking after a tech rally led by companies like Samsung Electronics Co. and SK hynix Inc. On the other hand, foreign investors poured a record 2.8 trillion won into the tech-heavy KOSDAQ market this month, surpassing the previous high set in July 2023. The surge in KOSDAQ investments was partly fueled by a new investment fund offering tax benefits and loss protection.
The newly launched investment fund, operating under the Korea National Growth Fund, focuses on companies specializing in artificial intelligence, rechargeable batteries, hydrogen, biotechnology, and related sectors. Despite the Korea Composite Stock Price Index (KOSPI) hitting record highs, concerns arose over rising volatility and concentration of gains in a few heavyweight stocks. The KOSPI 200 volatility index closed at 74.26, up 3.72 percent, while the KOSPI reached a new high of 8,476.15.
