Foreign investors shift to net selling of S. Korean securities in Aug

Seoul, Sep 12
Foreign investors turned to net sellers of South Korean securities in August, driven by profit-taking in equities and reduced arbitrage opportunities in the bond market, central bank data showed on Friday.

Offshore investors purchased a net US$180 million worth of local stocks last month, while they offloaded $770 million worth of bonds, resulting in a combined net outflow of $600 million, according to the data from the Bank of Korea (BOK), reports Yonhap news agency.

It marked the first monthly decline in foreign securities investment in four months.

"Net inflows of equity investment slowed significantly in August due to profit-taking in semiconductor and some other sectors," a BOK official said. "In the bond market, maturities and a decline in arbitrage opportunities led to net outflows."

The central bank also noted that the Korean won remained nearly unchanged against the U.S. dollar in August, hovering in the 1,390 won range.

Daily fluctuations in the won-dollar exchange rate edged up, averaging 5.8 won in August compared with 5.1 won in July, the BOK added.

South Korean stocks traded more than 1 percent higher late on Friday morning, heading toward a new all-time high, as big-cap chip shares sharply gained ground tracking a recent rally of artificial intelligence (AI) shares on Wall Street.

The benchmark Korea Composite Stock Price Index (KOSPI) had risen 37.19 points, or 1.11 percent, to 3,381.39 as of 11:20 a.m., surpassing the record high of 3,344.2 posted the previous day.

Overnight, major U.S. indexes closed higher, with the Dow Jones Industrial Average jumping 1.36 percent, the tech-heavy Nasdaq composite rising 0.72 percent, and the S&P 500 adding 0.85 percent.

Investor sentiment was boosted as the latest U.S. consumer price index (CPI) buoyed bets the Fed will move to cut key rates next week.

The CPI showed inflation is still above the Fed's 2 percent target but is calm enough for it to give the green light to cut rates, considering the weakness in the labor market.

In Seoul, market bellwether Samsung Electronics jumped 2.32 percent, and its chipmaking rival SK hynix shot up 6.68 percent. Internet portal operator Naver increased 1.5 percent, and Kakao, the operator of the country's dominant mobile messenger, surged 7.43 percent.