By Seo Jee-yeon
Staff Reporter


Foreigners’ shareholdings fell below 40 percent of the main bourse market capitalization for the first time in two years as they continued selling local stocks to take profits this year.

The Korea Exchange (KRX) said that foreign investors’ shareholdings fell to 39.93 percent of the market capitalization of the main Korea Stock Exchange as of Tuesday from 42.03 percent at the beginning of the year.

It is the first time that the portion of their shareholdings has fallen below the 40-percent mark since December, 2003. The ratio has kept falling after peaking at 43.9 percent in July last year.

Foreign investors cut their exposure to Korean stocks, taking a recent rally as an opportunity to lock in profits. Still, domestic institutions absorbed heavy sell-offs by foreign investors, allowing the market to extend its upward momentum.

Despite the fall in their shareholdings portion, the value of their stocks rose to 253 trillion won on Tuesday from 173 trillion won at the beginning of the year, boosted by rises in stock prices.

``Foreign investors opted to take profits after the recent rally, leading to the fall in the portion of their holdings,’’ KRX official Shin Kwang-sun said. ``They are adjusting their Korean stock portfolios in line with their global portfolio management.’’

Korean stocks are some of the best performers the world. Despite steep correction Thursday, the Korea Stock Exchange and the Kosdaq market have set new highs on ample liquidity in the market.

``Foreign investors are likely to cut their shareholdings further going forward,’’ Shin said.

Foreign investors’ net selling of local stocks stood at nearly 3 trillion won this year. It is the first time foreign investors have become net sellers in the main stock market in three years.

On the tech-heavy Kosdaq market, foreign shareholdings also fell to 13.48 percent from 15.36 percent at the beginning of the year. But the value of their holdings of Kosdaq shares also rose to 13.7 trillion won from 12.1 trillion won.

``It’s meaningful in that domestic institutions are beginning to take a leading role in the local bourse,’’ Goodmorning Shinhan Securities said in a research note.

Of foreign investors shareholdings, the nation’s top 100 companies in terms of market capitalization accounted for nearly 96 percent, the KRX said.

jyseo@koreatimes.co.kr