By Kim Tae-jong
Foreign investors are continuing to buy Korean stocks despite the global economic woes to hit a 20-month high in January, data showed Thursday.
According to the Financial Supervisory Service (FSS), the net amount of local stocks bought by overseas investors last month reached 6.2 trillion won ($5.54 billion), the biggest monthly net purchase since April 2010.
Thanks to the increase, offshore players’ investments on the Seoul bourse amounted to 380.8 trillion won as of the end of January, accounting for 30.8 percent of the total market capitalization.
They also splurged in the bond markets by chalking up a net purchase of 1.2 trillion won in the first month of this year.
The FSS attributed the uptick to renewed optimism over the global economy with the debt crisis in the eurozone and the economic downturn in the United States showing signs of being more effectively addressed.
“Foreign investors seem to positively regard the comparatively solid Korean stock market as they readjust their investment portfolios in the new year with various economic indexes in the United States showing signs of improvement,” an FSS official said.
The continuous net purchase of stocks by global investors also helped the local bourse stage a solid performance last month. The benchmark KOSPI, which closed at 1,825.74 on Dec. 29, ended at 1,955.79 on Jan. 31.
Investors from the United States and the United Kingdom, who marked net selling in August and November, have returned to buying mode with the biggest orders.
In January alone, investors from U.K. and U.S. bought local stocks worth 2.06 trillion and 1.73 trillion won, respectively.
As of last month, U.S. holdings of Korean stocks amounted to 153.1 trillion won, or 40.2 percent of all foreigner-owned stocks, followed by the United Kingdom with 41 trillion won and Luxembourg with 25 trillion won, accounting for 10.8 and 6.6 percent, respectively. Capital from Europe took 30.3 percent of foreign stock investments at 115.4 trillion won.
Their top picks last month were mostly the country’s flagship corporations such as Samsung Electronics, LG Chem, Hynix Semiconductor, Hyundai Motor, Samsung Heavy Industries and POSCO.