According to Bank of Korea figures released on November 30, overseas equity purchases categorized as "general government" reached 24.514 billion dollars in the first three quarters of the year. The central bank noted that this category generally reflects the National Pension Service. The amount is nearly double the 12.785 billion dollars recorded a year earlier.
A separate category used to indicate individual retail investors, "non-financial corporations and others," showed offshore stock purchases of 16.625 billion dollars in the same period. That figure was up 74 percent from last year, but still smaller than the pension fund's buying.
The gap between the two groups has widened. Last year, the National Pension Service bought about 1.3 times more overseas equities than retail investors during the January to September period. This year, the ratio has risen to about 1.5 times. When measured against all offshore equity purchases by Korean residents, the pension fund accounted for about 34 percent, compared with 23 percent for individuals.
Retail activity has still been unusually strong. Data from the Korea Securities Depository show that individual investors bought a net 12.337 billion dollars in overseas stocks during October and November. October alone reached a record 6.813 billion dollars, followed by 5.524 billion dollars in November. If combined with earlier Bank of Korea data, retail investors' total offshore buying could reach 28.962 billion dollars through November. This figure is a simple addition of the two sets of data.
The rise in retail demand coincided with a sharp climb in the exchange rate. After staying below 1,400 won per dollar in August and September, the currency began strengthening in the holidays and then reversed course in October. On November 24, it touched 1,477.3 won in intraday trading, the highest level since April 9.
Many analysts say the exchange rate reflects a wider set of pressures beyond retail investor behavior. They point to the high cost of U.S. investments, the parallel weakness in the yen and the won, and foreign investors selling Korean stocks. In their view, retail buying is only one piece of the market, and the larger shifts are being driven by broader economic conditions.
reporter
Park Sae-jin
swatchsjp@ajunews.com
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