Have Foreigners' Net Purchases of South Korean Stocks Reached a 19-Month High in September?
Click to start listening
Synopsis
Foreign investments in South Korean stocks have surged to a 19-month high, driven by optimism in the chip industry. This trend marks a significant shift, showcasing the resilience of the local market amid fluctuating currency values. Discover the implications of this investment boom as we delve into the numbers and insights from central bank data.
Key Takeaways
- Foreign investments in South Korean stocks reached a 19-month high.
- Net purchases amounted to $4.34 billion in September.
- The electronics sector saw significant foreign investment.
- The KOSPI gained 9 percent in September.
- The Korean won depreciated against the US dollar.
Seoul, Oct 15 (NationPress) Foreign investors have significantly increased their net investment in South Korean stocks, achieving the highest level in over 18 months last month, driven by optimism regarding the chip industry, according to central bank data released on Wednesday.
Offshore investors acquired a net total of $4.34 billion in local stocks during September, the largest figure recorded since February 2024, when net investments amounted to $5.59 billion, as reported by the Bank of Korea (BOK) and cited by Yonhap news agency.
This represents the second consecutive month of positive net inflows into foreign securities, following a net investment of $180 million in August.
Additionally, foreign investors purchased $4.78 billion in bonds in September, recovering from a net sell-off of $770 million in the previous month.
The BOK stated, "Foreign investment has primarily targeted the electronics sector due to anticipated improvements in the semiconductor market." It added, "The rise in bond investments was fueled by increased demand for mid- to long-term bonds."
The Korea Exchange (KRX) reported that its semiconductor index surged by 26.8 percent, climbing from 3,780.05 on September 1 to 4,792.07 by September 30, while the benchmark Korea Composite Stock Price Index (KOSPI) saw a 9 percent increase during the same time frame.
Moreover, the central bank indicated that the Korean won depreciated against the US dollar in September, dropping to 1,402.9 won from 1,390.1 won in August.
Daily fluctuations in the won-dollar exchange rate decreased, averaging 3.9 won in September compared to 5.8 won in the previous month, according to the data.
In addition, foreign investors also net purchased Korean stocks in August, marking the fourth consecutive month of strong performance in the local stock market.
Offshore investors acquired a net total of 57 billion won ($41 million) in local stocks in August, following a net purchase of 3.41 trillion won the month prior, as per data from the Financial Supervisory Service (FSS).
According to this data, investors from the United States were the most active buyers last month, net purchasing 1.4 trillion won in shares, followed by investors from Ireland with 0.4 trillion won.
Point of View
The robust inflow of foreign investment into South Korean stocks signals strong international confidence in the market, particularly in light of promising developments in the semiconductor industry. This trend is essential for sustaining economic growth and further enhancing Korea's position in the global market.
NationPress
15/10/2025
Frequently Asked Questions
What factors contributed to the increase in foreign investment in South Korean stocks?
The increase in foreign investment can be attributed to rising expectations for improved conditions in the semiconductor industry, which has led to significant purchases in the electronics sector.
How much did foreign investors net purchase in South Korean bonds in September?
Foreign investors net purchased $4.78 billion worth of South Korean bonds in September, recovering from previous net selling.
What was the performance of the KOSPI in September?
The benchmark Korea Composite Stock Price Index (KOSPI) gained 9 percent in September, reflecting strong market performance.
How did the Korean won perform against the US dollar in September?
The Korean won weakened against the US dollar, falling to 1,402.9 won in September, down from 1,390.1 won in August.
Which country had the highest level of investment in South Korean stocks in September?
Investors from the United States were the top buyers in September, net purchasing 1.4 trillion won worth of shares.
