Foreign investors recorded their largest-ever monthly net selling of Korean stocks in February, driven by profit-taking following sharp market gains.
According to the Bank of Korea's "International Financial and Foreign Exchange Market Trends Since February" report released on the 12th, foreign investment in domestic securities (stocks and bonds) showed a net outflow of $7.76 billion last month, reversing to outflows after just one month.
This marks the second-largest monthly net outflow on record, following the $8.97 billion outflow in July 2008 during the financial crisis.
The massive exodus from equities was the primary driver. Stock funds recorded a net outflow of $13.5 billion, surpassing the previous record of $11.04 billion set in March 2020. A Bank of Korea official explained, "This was the largest monthly net outflow on record due to heightened concerns over artificial intelligence (AI) investments and profit-taking sales following domestic stock price increases."
Bond funds, meanwhile, saw a net inflow of $5.74 billion, supported by bargain-hunting amid rising interest rates and robust investment demand primarily from the private sector. This marks four consecutive months of net inflows since November last year.
The daily average fluctuation of the won-dollar exchange rate widened to 8.4 won last month from 6.6 won in January. The volatility rate also increased to 0.58% from 0.45% in January.