Overseas Investors Losing Interest in Korean Equities

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Overseas Investors Losing Interest in Korean Equities

Korean company stocks are losing their luster for foreign investors, securities analysts said. Foreign holdings of blue-chip stocks have been falling in recent days.

Foreign investors sold shares worth 286.5 billion won ($210 million) in the three trading days this month, a sharp reversal of the trend in the first three months of the year, when they purchased 3 trillion won in equity.

"It has been a marked development lately," an analyst at SK Securities, Kim Dae-jung, said, referring to the sales by foreign investors. "The reversal has picked up speed with the falling value of the won." Foreigners dumped 177.6 billion won in equity Wednesday alone.

The selloff is concentrated in seven of the 20 stocks that foreign investors bought heavily this year, according to SK Securities. Samsung SDI, Samsung Electronics and Cheil Communications are some of the stocks that have seen foreign stakes falling. Foreign interest continues in eight stocks, including Pohang Iron & Steel, Samsung Heavy Industries and Hyundai Motor.

But Daewoo Securities strategist Lee Jong-wu said the trend will not lead to an all-out selloff by foreign investors. "The net sales will likely continue, but investors will suffer losses if they pull out at this point."



by Chung Jeh-won

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