South Korean investors have net sold U.S. stocks for the first time in four months.
The Korea Securities Depository reported on Tuesday that domestic investors net sold 281.39 million USD in the U.S. stock market from December 22 to 26.
This marks the first net selling in the U.S. market since the third week of August, when investors offloaded 207.85 million USD.
On December 24, the government identified individual investors’ overseas investments as a key factor contributing to the high won-dollar exchange rate and introduced policies to encourage a return to domestic markets.
The new initiative offers tax incentives for investors who sell their foreign stocks held as of December 23, convert the proceeds to Korean won, and reinvest in domestic stocks for the long term.
Analysts suggest that ongoing exchange rate volatility has also played a significant role, alongside policy factors. As year-end approaches, a combination of tax planning and profit-taking has likely influenced investor behavior.
Despite these measures, funds have yet to flow back into the South Korean stock market. From December 22 to 26, individual investors net sold 7.1827 trillion KRW (approximately 4.98 billion USD) in domestic equities.
Interestingly, investor deposits, representing standby funds for stock market investment, reached a monthly high of 85.4251 trillion KRW (59.17 billion USD) on December 26. It appears that individual investors are carefully assessing the optimal timing to enter the domestic market.
