By Kwon Mee-yoo
Foreign investors are expanding their influence in the local stock market, boosting the stock index.
According to the Korea Exchange (KRX) Friday, foreign investors held 33.3 percent, or 371.5 trillion won, worth of Korea Composite Stock Price Index (KOSPI) stocks, of which the total market capitalization was 1.115 quadrillion won.
This is the first time since Oct. 1, 2007 that foreigners have held more than one third of local shares.
Foreign investors have purchased more than 8.6 trillion won worth of stocks so far this year, including a record-high monthly buying of 6.2 trillion won in January. They made up 32.9 percent at the end of last year and increased the ratio 0.4 percentage points in a month with aggressive investments.
The global investors mainly purchased large capital stock such as Samsung Electronics, Hyundai Heavy Industries, Hynix and LG Chem.
The KOSPI, which closed at 1,825 last year, has soared 200 points this year, rising above 2,000 with an earnings rate of over 9 percent.
Experts expect the buying trend among international investors to continue.
"Last year, Global Emerging Markets fund invested around 13 percent in their portfolio. If they raise the share by about 0.5 percentage points, they could put an additional 3 to 4 trillion won into the KOSPI," Kim Byung-yeon, a market analyst at Woori Investment & Securities, said.
"We are seeing capital withdrawn from the stock market after last August, seeking risk-free assets, is returning as investors are regaining their confidence. Foreign buying is a part of this trend and it won't be reversed any time soon," Lee Da-seul, an analyst at Korea Investment & Securities said.
According to KRX statistics beginning in December 2000, foreign investors marked the highest percentage in the KOSPI market in April 2004, being responsible for 44.1 percent of the total.
The ratio fell below 40 percent after June 2006 and hit bottom at around 27 percent in April 2009, soon after the global financial crisis.