Bank of Korea releases international finance and foreign exchange market data

Equity outflows rise $5.15 billion from September to October

Dampened sentiment over AI monetization concerns drives wider net selling

The Kospi is displayed on a screen at Hana Bank's dealing room in Jung-gu, Seoul, on Thursday. [Yonhap]
The Kospi is displayed on a screen at Hana Bank's dealing room in Jung-gu, Seoul, on Thursday. [Yonhap]

Foreign securities investment recorded a net outflow of $13.7 billion in October, though the overall figure shrank from September as bond flows returned to positive territory for the first time in four months.

According to data the Bank of Korea released Thursday on international finance and foreign exchange market conditions, net outflows from foreign investment in securities — both shares and bonds — totaled $13.7 billion in October. A net outflow means more capital left the country than entered.

Foreign capital has posted net outflows for nine consecutive months since February. The October figure, however, was 31.4 percent smaller than the $19.97 billion net outflow recorded in September.

The cumulative net outflow from January through October reached $160.74 billion.

Breaking down by asset class, equity outflows widened from $14.16 billion in September to $19.31 billion in October — a difference of $5.15 billion, equivalent to about 6.8 trillion won. After briefly recording a net inflow of $40 million in August — the first in eight months — shares have now seen two consecutive months of net selling.

Bond flows swung from a net outflow of $5.81 billion in September to a net inflow of $5.61 billion in October, marking the first net inflow since June, when inflows totaled $1.65 billion.

"Equity outflows expanded as investor sentiment weakened amid concerns over the monetization of global AI investment," the Bank of Korea said, adding that bond flows returned to positive territory "on the back of inflows tracking the World Government Bond Index and a shift to a positive carry-trade incentive."

The credit default swap premium on South Korean government bonds — based on the five-year foreign exchange stabilization bond — averaged 24 basis points last month, up slightly from 22 basis points the previous month. One basis point equals 0.01 percentage point.

The average daily fluctuation in the won-dollar exchange rate last month was 4.6 won, with a daily change rate of 0.34 percent, both narrower than the previous month's 7.0 won and 0.52 percent.


kimstar@heraldcorp.com