Foreign investors sold the largest amount of Korean stocks in over 3 years in September amid escalating geopolitical risks and skepticism over the artificial intelligence (AI) sector, central bank data showed Thursday.
Offshore investors sold a net US$5.57 billion worth of local stocks last month, following $1.85 billion worth of selling in August, according to the data from the Bank of Korea.
The September tally marks the largest sell-offs since May 2021 when the corresponding reading was $8.23 billion.
The central bank said foreigners’ stock selling came amid the geopolitical risks in the Middle East and growing skepticism over the growth of the AI sector.
Foreigners bought a net $3.04 billion worth of local bonds last month, following a net purchase of $5.47 billion a month earlier, the data showed.
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, down from 34 basis points the prev
ious 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