Foreign investors` stock selling hits record high

SEOUL, Oct. 26 (Yonhap) -- Net selling of South Korean stocks by foreign
investors hit a record high this year as they were spooked by a global credit
crunch, the country's financial watchdog said Sunday.

Overseas investors sold a net 42.61 trillion won (US$29.59 billion) worth of
local stocks as of Friday, the highest figure since the market's opening in 1992
and a significant jump from a 30.56 trillion won net sale for all of 2007,
according to the Financial Supervisory Service (FSS).
The watchdog said the sell-offs are likely to continue as investors try to reduce
their exposure to emerging markets amid a global credit squeeze.
Analysts said foreign investors have sold the largest amount worth of stocks in
South Korea compared with other emerging markets since 2007. They attributed the
trend to Korea being earlier flooded with ample liquidity, on the back of cash
inflows into local stock funds.
The country's key stock index, which surpassed the landmark 2,000-point mark for
the first time in July 2007, has halved this year. It was hovering just above
900-point level as of Friday's close.
"They are also unloading local stocks on concerns over slowing economic growth.
But I think their net sale may slow down toward the end of this year," said Rhoo
Yong-seok, an analyst at Hyundai Securities Co.
As foreign investors have reduced their holdings of local stocks, their total
market share has also declined.
As of last Monday, foreign investors held 178.9 trillion won worth of stocks
listed on the main bourse, Korea Exchange, or 29.46 percent of the total market
value. That figure is down 2.93 percentage points from the end of December.
Foreign ownership of local shares has been on the decline since peaking at 41.98
percent in 2004. The ratio fell to 39.7 percent in 2005 and to 37.22 percent in
2006.
sam@yna.co.kr
(END)