Foreign net selling of S. Korean stocks hits record high in February

The screen displays the KOSPI index at the dealing room at Hana Bank's headquarters in central Seoul, Feb. 23. Korea Times photo by Shim Hyun-chul

Foreign investment in the South Korean stock market recorded its largest ever monthly net outflow in February amid growing caution over a potential artificial intelligence (AI) bubble and profit-taking, central bank data showed Thursday.

Offshore investors sold a net $13.5 billion worth of local equities last month, following $500 million worth of net selling in January, according to the data from the Bank of Korea (BOK).

The February figure marked an all-time monthly high, surpassing the previous record of $11.04 billion set in March 2020.

In the bond market, foreign investors bought $5.74 billion worth of bonds in February, compared with purchases of $2.44 billion a month earlier.

Taken together, foreigners sold a net $7.76 billion worth of local securities last month, reversing from a net purchase of $2.39 billion in January.

The February figure marked the second-largest monthly net outflow since July 2008, when the figure reached a record $8.97 billion.

"Equity funds posted the largest monthly net outflow amid growing caution over AI-related investments and profit-taking following recent gains in local stock prices," said Kim Bo-seok, chief of the BOK's international financial trends team.

"Larger net inflows into bond funds were supported by bargain hunting amid rising market interest rates and solid investment demand, particularly from the private sector."