(C) KED Global
SEOUL — Foreign investors shifted their focus from the Korean stock market to fixed-income assets last month, marking a cautious start to the year amid global economic shifts.
According to the "January 2026 Foreign Security Investment Trends" report released by the Financial Supervisory Service (FSS) on February 13, foreign investors recorded a net sell-off of 98 billion won in the domestic equity market.
Equity Market: Mixed Trends by Exchange and Region
While foreign investors remained net buyers on the benchmark KOSPI, purchasing 361 billion won worth of shares, they aggressively unloaded positions on the tech-heavy KOSDAQ, resulting in a net sell-off of 459 billion won.
The movement varied significantly by region:
Buying Interest: Investors from Europe and Asia led the buying spree, with net purchases of 6.3 trillion won and 1.4 trillion won, respectively. Specifically, Ireland (2.33 trillion won), the UK (1.76 trillion won), and Luxembourg (1.35 trillion won) were the top net buyers.
Selling Pressure: Conversely, investors from the Americas—led predominantly by the United States—offloaded a massive 7.8 trillion won. The U.S. alone accounted for 7.79 trillion won in net sales, making it the largest selling nation, followed by Qatar and the Netherlands.
As of the end of January, the total value of domestically listed stocks held by foreigners stood at 1,701.4 trillion won, accounting for approximately 32% of the total market capitalization.
Bond Market: Strategic Flight to Quality
In stark contrast to the equity market, the bond market saw sustained interest for the third consecutive month. Foreigners recorded a net investment of 3.56 trillion won in listed bonds—a figure calculated by subtracting sales and matured volumes from total purchases.
Key highlights of the bond investment include:
Asset Type: A strong preference for Government Bonds was evident with a net investment of 6 trillion won, while 2.1 trillion won was retrieved from Monetary Stabilization Bonds (MSBs).
Maturity Preference: Investors favored mid-to-long-term stability, pouring 3.89 trillion won into bonds with maturities of 5 years or more, and 3.08 trillion won into those with 1 to 5-year maturities. Meanwhile, short-term bonds (less than 1 year) saw a net withdrawal of 3.42 trillion won.
By the end of January, the total value of listed bonds held by foreign investors reached 330.5 trillion won, representing 11.9% of the total outstanding listed bonds in South Korea.
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