Foreign Investors' March Stock Market Outflow Hits Record 54 Trillion Won

Foreign investment funds withdrew over 54 trillion won from the domestic stock market last month, marking the largest net outflow on record. This figure surpassed the record set in July 2008. According to the 'International Finance and Foreign Exchange Market Trends' report released by the Bank of Korea on the 9th, foreign net outflow of domestic securities investment funds in March was calculated at $36.55 billion (approximately 54 trillion won).

Since the start of the year, foreign fund flows turned from a net inflow of $2.39 billion in January to a net outflow in February, followed by a large-scale departure in March. The cumulative net outflow from January to March reached $41.92 billion, nearly equivalent to the total net inflow for the entire previous year.

The departure of foreign investors was particularly prominent in the stock market. Foreigners net sold $29.78 billion worth of domestic stocks in March alone, and a total of $43.33 billion has left the stock market since the beginning of the year. Bond funds also recorded a net outflow of $6.77 billion in March, reversing the previous trend of net inflows.

Geopolitical risks, such as Middle East conflicts, influenced investor sentiment following the stock market rally in January-February. The rise in the won-to-dollar exchange rate (weakening of the Korean won) is occurring in conjunction with the outflow of foreign funds. An increase in international oil prices and net stock selling by foreigners contributed to the upward pressure on the exchange rate.