Korean individual investors withdrew funds from overseas stock markets for two consecutive months in April and May, with May recording net withdrawals of $605.5 million according to Bank of Korea data. During the same period, these investors conducted large-scale net purchases on the domestic KOSPI market, particularly targeting Samsung Electronics and SK Hynix as foreign investors sold ₩69.4 trillion worth of stocks between May 7 and June 5. The shift in investment patterns preceded a sharp market correction in early June, when KOSPI dropped over 8% intraday on June 7, triggering trading halts, followed by another 5.35% decline on June 8.
Bank of Korea Reports Two-Month Overseas Stock Withdrawal
Non-financial corporations' overseas stock investment reached -$605.5 million in May, following April's -$424.9 million, according to Bank of Korea statistics. The net withdrawal amount increased 42.5% month-over-month, bringing the two-month total to $1.03 billion. US stock transactions specifically showed net selling of $939.77 million in May and $469 million in April, based on Korea Securities Depository data from the Seibro portal.
The trend represents a sharp reversal from early months. January recorded $5.71 billion in overseas stock investment, which declined to $3.57 billion in February and $637.2 million in March before turning negative in April. The four-month swing from January to May totaled $6.32 billion in directional change.
Individual Investors Net Buy ₩56.44 Trillion on KOSPI
Between May 7 and June 5, individual investors net purchased ₩56.44 trillion on the securities market, according to Korea Exchange data. This buying absorbed a substantial portion of the ₩69.4 trillion in net sales by foreign investors during the identical period.
Investment in leveraged exchange-traded funds tracking Samsung Electronics and SK Hynix doubled stock price movements attracted significant capital. From May 27 to June 19, individual net purchases of these products reached approximately ₩8.2 trillion, while inverse ETF net purchases totaled approximately ₩300 billion, according to Korea Capital Market Institute data.
Foreign Investors Sell ₩57.44 Trillion in Samsung and SK Hynix
Foreign selling concentrated heavily on Samsung Electronics and SK Hynix during the May 7 to June 5 period. Foreign investors net sold ₩30.12 trillion in Samsung Electronics and ₩27.32 trillion in SK Hynix, accounting for ₩57.44 trillion combined from these two stocks alone.
Individual investors took the opposite position, conducting net purchases in both companies as stock prices rose. The Korea Capital Market Institute noted this capital concentration in single-stock leveraged products following their launch on May 27.
KOSPI Triggers Circuit Breakers with 8% Intraday Drop on June 7
KOSPI fell over 8% intraday on June 7, activating both sidecar and circuit breaker trading halts. Individual investors net purchased over ₩3 trillion on KOSPI that day. Samsung Electronics and SK Hynix both declined sharply during the session.
The selling continued on June 8, with KOSPI closing down 5.35% at 7246.79. Samsung Electronics dropped 6.25% and SK Hynix fell 5.68% on that date. The two-day decline totaled 12.7% for Samsung Electronics and 11.4% for SK Hynix. Individual investors net purchased ₩584 billion in the electrical and electronics sector on June 8.
FAQ
What was the size of Korean investors' overseas stock withdrawal in May?
Non-financial corporations withdrew $605.5 million from overseas stock markets in May, following a $424.9 million withdrawal in April, according to Bank of Korea data.
How much did individual investors buy on KOSPI between May 7 and June 5?
Individual investors net purchased ₩56.44 trillion on the securities market between May 7 and June 5, while foreign investors net sold ₩69.4 trillion during the same period, according to Korea Exchange statistics.
What happened to Samsung Electronics and SK Hynix stock prices on June 7-8?
Samsung Electronics declined 12.7% over June 7-8, while SK Hynix fell 11.4% during the same two-day period, as KOSPI dropped over 8% intraday on June 7 and closed down 5.35% on June 8.
