Seoul: Foreign investors continued to be net sellers of South Korean stocks and bonds for the third consecutive month in April, the central bank data showed, although the outflow volume narrowed amid signs of a possible resolution to the Middle East conflict. Offshore investors sold a net US$2.13 billion worth of local stocks and bonds last month, following net sales of $36.5 billion in March.
According to Yonhap News Agency, foreign investors sold a net $7.76 billion in February, following net purchases of $2.39 billion in January. In April, foreign investors sold a net $2.68 billion worth of stocks while purchasing a net $550 million worth of bonds. "The stock market experienced an outflow for four straight months as investors closely monitored geopolitical risks in the Middle East," a central bank official stated.
The official further explained that the overall volume of net selling narrowed significantly following a ceasefire agreement between the U.S. and Iran, which led to a recovery in investor sentiment to some extent. Additionally, South Korea's entry into the World Government Bond Index (WGBI), a key global bond benchmark run by FTSE Russell, also contributed to net inflows into the bond market.
South Korea initiated a phased eight-month entry into the index in April. The WGBI tracks sovereign debt from more than 20 major economies, including the United States, Japan, and China.