Foreigners sell Korean stocks for 2nd month in September amid China, semiconductor woes

Foreign investors sold South Korean stocks for a second straight month in September amid woes over a slowdown in the Chinese economy and a delay in the recovery of the chipmaking sector, central bank data showed Friday.

Offshore investors sold a net US$1.33 billion worth of local stocks last month, following net selling of $910 million a month earlier, according to the data from the Bank of Korea (BOK).

The central bank said foreigners' net stock selling came amid growing woes over a slowdown in the Chinese economy, the world's second-largest economy and the country's top trading partner, and a delay in the much-awaited recovery of the semiconductor segment.

Foreigners also sold a net $100 million worth of local bonds last month, compared with net selling of $790 million a month earlier.

In August, foreign investors offloaded a net $1.7 billion worth of local stocks and bonds, the largest since December 2022, when the comparable figure was $2.42 billion.

Meanwhile, the premium on credit default swaps (CDS) for South Korea's five-year dollar-denominated currency stabilization bonds amounted to 32 basis points in September, up from 31 basis points the previous month. A basis point is 0.01 percentage point.

The CDS premium reflects the cost of hedging credit risks on corporate or sovereign debt. A rise implies a drop in the credit spreads of sovereign bonds and higher borrowing costs.

Source: Yonhap News Agency

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