▲ Stock Market
Foreign investors pulled a record amount of capital out of the Korean stock market last month as they moved to realize profits.
According to the "Trends in International Financial and Foreign Exchange Markets" report released by the Bank of Korea on June 15, foreign investment in Korean securities (stocks and bonds) saw a net outflow of $26.15 billion in May.
A net outflow means that the amount of foreign investment capital leaving the Korean stock and bond markets exceeded the amount entering them.
The net outflow in May was the second-largest on record, following March (-$36.55 billion). Based on the won-dollar exchange rate at the end of last month (1,507.9 won), this equates to approximately 39.4315 trillion won.
This marks the fourth consecutive month of net outflows since February.
The cumulative net outflow from the beginning of this year through May reached $70.2 billion.
By asset class, stock investments saw a record net outflow of $31.83 billion last month.
This is the fifth consecutive month of net outflows since January.
Conversely, bond investments saw a net inflow of $5.68 billion.
This marks the second consecutive month of net inflows, following the previous month (+$550 million).
A Bank of Korea official explained, "The net outflow of stock funds expanded due to rebalancing following the rise in domestic stock prices and profit-taking sales," adding, "Bond funds saw an increase in net inflows driven by the influx of capital tracking the World Government Bond Index (WGBI) and bargain hunting following the rise in market interest rates."
The Credit Default Swap (CDS) premium on Korean government bonds (based on 5-year Foreign Exchange Stabilization Fund bonds) averaged 25 basis points (1bp=0.01%p) last month, down 6bp from the previous month (31bp).
The average daily fluctuation range and volatility rate of the won-dollar exchange rate in May were 6.6 won and 0.45%, respectively, both lower than the previous month (8.9 won and 0.59%).
※ Please note: This article was translated by AI and may contain errors.