Foreign investors bought a net 62.5 billion won ($52.4 million) in Korean securities on a single day on Tuesday, increasing the total net figure to 2.07 trillion won for the first 10 sessions of this month, according to the Korea Exchange.

Foreigners have kept up their net buying position since Feb. 25, except two trading days, helping to boost the benchmark Korean composite stock index (Kospi) briefly over 1,970. Offshore investors sold a net 16 trillion won worth of local shares for eight consecutive months until January. They reversed to a net purchase of 300 billion won last month on a monthly basis.

Local institutional investors have been dumping shares to take profits on foreign buying. They have been net sellers for 11 straight days, selling a net 131.4 billion won on Tuesday alone. The Kospi as a result finished Tuesday at 1,969.97 after losing 2.3 points or 0.12 percent.

Market analysts believe foreigners will be unfazed by institutional selling and expect the rising momentum to continue. Overseas investors briefly turned inactive ahead of the monetary policy meeting of the U.S. Federal Open Market Committee held on Tuesday and Wednesday (U.S. local time).

“If the dollar remains stable, emerging markets’ currencies will continue to strengthen, which will also sustain assets of emerging economies and raw material prices,” said Park Suk-hyun, an analyst at Eugene Investment & Securities Co. The Kospi is headed upward with foreigners returning attention to higher risk and return assets, he added.

Trajectory chart since 2013 shows foreign investors keep up net buying for four to five months, and once the momentum is set, their net purchase reached over 10 trillion won a year, he explained, estimating another 10 trillion won could flow into the market over the next three to four months.

Another appeal of Korean assets is the rising value of the local currency against the U.S. dollar as offshore investors can eye on foreign exchange gains when investing in Korean securities, said another analyst Kim Ye-eun of LIG Investment Securities Co. who also bet on continued net buying by foreigners.

By Han Ye-kyung

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