Number of big foreign investors in Korean stocks dips over 6 years

The number of big foreign investors in Korean stocks has tumbled nearly 30 percent over the past six years, a corporate tracker said Thursday, in a sign the local bourse is increasingly losing its appeal amid a lack of transparent corporate governance.

A total of 164 offshore investors had owned 5 percent or more of 246 listed companies in Asia's fourth-largest economy as of Friday, according to the Korea CXO Institute.

The number of large foreign players was down 28 percent from March 2016, with that of big-stake companies shrinking 24 percent.

The institute said the main reason is a steady decline in the number of big foreign investors who try to hold considerable stakes in local listed companies in pursuit of high dividends and large profits from price gains.

"Amid a decreasing chance of high dividends and profit-taking, local companies should step up efforts to win back investor confidence and make their governance structures more transparent," it said.

In particular, the so-called panda shopping, which refers to big-pocket Chinese investors' purchases of Korean stocks, has lost steam during the period. In 2016, Chinese investors held 5 percent or more of 50 listed companies, but that number nearly halved to 26 this year.

Large U.S. investors had owned 5 percent or more of 102 listed firms as of Friday, down from 121 six years earlier. The comparable number for Japanese investors dropped to 28 from 48 over the cited period.

Yet the combined value of stocks owned by those big foreign investors rose more than 40 percent to 59 trillion won ($46.6 billion) from 42 trillion won over the six-year period.

U.S. asset management titan BlackRock Fund Advisors had 5 percent or more of 10 companies, including top-cap Samsung Electronics, which were valued at 29.85 trillion won, the largest among those big foreign investors.

Boston-based Fidelity Management & Research Company had the largest number of big-stake local listed companies with 50, including non-life insurers DB Insurance and Hyundai Marine & Fire Insurance.

Yonhap