Foreign investors withdrew $6.2 billion from South Korean equities in August amid a broader regional rebalancing, choosing to rotate towards markets deemed less vulnerable to AI volatility, notably Taiwan and India.
Foreign investors pulled billions from South Korean equities in August as money shifted across Asia towards markets seen as less exposed to the volatile fortunes of artificial intelligence shares.
Bloomberg-compiled data cited by BeInCrypto showed net outflows of $6.2 billion from South Korean stocks last month, while Taiwan attracted $1.7 billion after six weeks of selling. The movement reflects a broader reordering in regional capital flows, with investors stepping back from chip-heavy markets that have powered much of Asia’s recent rally.
The retreat from Korea comes after a sharp reversal in sentiment towards AI-linked names. According to The Korea Times, foreign investors became net sellers of South Korean shares in August 2024, ending a nine-month buying run. Electronics stocks bore the brunt of the selling, with Samsung Electronics and SK hynix among the hardest hit as doubts grew over the pace of global AI demand.
Reuters, citing HSBC strategist Herald van der Linde, said the unusually large swings in AI-related sectors were prompting global investors to diversify. That shift has left India looking comparatively attractive to some funds, while Thailand, Indonesia and the Philippines have also drawn inflows, albeit on a much smaller scale than the money leaving Korea and Taiwan.
The scale of the rebalancing is also visible in bond and equity data from South Korea. The Korea Times reported that offshore investors continued to buy Korean listed bonds in August even as they sold shares, suggesting that the exodus was less a wholesale rejection of the market than a rotation away from technology-sensitive equities.
Not all market watchers agree that Korea has become the weaker proposition. Isaac Thong of Aberdeen Asian Income Fund told Reuters that falling valuations could make the market more appealing than Taiwan in some areas, despite the recent turbulence.
For now, though, the pattern across Asia is clear: investors are trimming exposure to the region’s most AI-dependent markets and redistributing capital towards places they see as offering steadier returns.
- https://bitcoinethereumnews.com/tech/korea-sheds-6-2-billion-in-august-as-asia-rotates-away-from-ai/?utm_source=rss&utm_medium=rss&utm_campaign=korea-sheds-6-2-billion-in-august-as-asia-rotates-away-from-ai – Please view link – unable to able to access data
- https://www.koreatimes.co.kr/economy/20240913/foreigners-become-net-sellers-of-south-korean-shares-in-august/ – In August 2024, foreign investors became net sellers of South Korean shares, ending a nine-month buying streak. Offshore investors net sold 2.51 trillion won (approximately $1.88 billion) worth of local shares. This shift was attributed to skepticism about the growth potential of the global AI sector, leading to the selling of electronics stocks. Notably, Samsung Electronics and SK hynix experienced significant net outflows. Despite this, foreign investors net purchased about 8.01 trillion won worth of local listed bonds in the same month, becoming net buyers after two consecutive months of net selling.
- https://koreajoongangdaily.joins.com/news/2024-09-13/business/finance/Foreign-investors-snap-stock-buying-streak-to-become-net-sellers-in-August/2134774 – Foreign investors turned into net sellers of Korean stocks in August 2024, ending a nine-month buying streak. The net outflow amounted to $1.85 billion, marking the first net selling since October of the previous year. The sell-off was primarily driven by skepticism towards the global AI sector’s growth potential, leading to the selling of electronics stocks. Samsung Electronics and SK hynix saw the largest net outflows among listed stocks. However, foreign capital inflow surged in bond trading, with investors net buying bonds worth $5.47 billion in August, a significant increase from the previous month.
- https://www.businesskorea.co.kr/news/articleView.html?idxno=225247 – In August 2024, foreign investors sold $1.85 billion in Korean stocks, marking the first net outflow since October of the previous year. This shift was attributed to profit-taking in equities and reduced arbitrage opportunities in the bond market. Despite the stock outflow, foreign investors made a net investment of $3.63 billion in domestic securities, driven by a substantial increase in bond investments. The Bank of Korea noted that skepticism towards the growth potential of the global AI sector led to the selling of electronics stocks, resulting in the net sell-off.
- https://www.investing.com/news/economy-news/foreign-inflows-into-asian-equities-slow-sharply-in-july-hit-by-tech-slump-3558575 – In July 2024, foreign inflows into Asian equities slowed sharply, influenced by increased market volatility and heavy selling in technology stocks. This trend was compounded by weak economic data and disappointing corporate earnings, which dampened risk sentiment among investors. The slowdown in inflows was particularly notable in markets heavily reliant on technology sectors, such as South Korea and Taiwan, where concerns over the global AI sector’s growth potential led to significant sell-offs in electronics stocks.
- https://www.investing.com/news/economy-news/asia-exchina-equities-have-biggest-monthly-foreign-outflow-in-nearly-212-years-3707438 – In October 2024, Asian equities, excluding China, experienced the largest monthly foreign outflow in nearly two and a half years. Investors, wary of the U.S. presidential election outcome, reacted to concerns over weaker-than-expected corporate earnings, overvalued stocks, and rising bond yields. This trend was particularly evident in markets like South Korea and Taiwan, where technology stocks faced significant sell-offs due to skepticism about the global AI sector’s growth potential.
- https://english.news.cn/asiapacific/20240831/dec96b2420ad428c8077f4e59e9ee5a7/c.html – In July 2024, the Philippines’ foreign investments yielded net inflows of $1.38 billion, marking a reversal from the previous month’s net outflows. The majority of investments originated from Britain, the United States, Singapore, Luxembourg, and Norway, collectively contributing 93.7% of the total inflows. This trend indicates a regional shift in investor sentiment, with funds moving away from markets like South Korea and Taiwan, which experienced outflows due to concerns over the global AI sector’s growth potential.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
3
Notes:
The article references data from August 2024, which is nearly a year old. The most recent data available is from August 2024, indicating that the content is outdated. The article also cites sources from 2024, further confirming its age. Given the significant time lapse, the information may no longer be relevant or accurate. Additionally, the article appears to be a republished press release, which typically warrants a lower freshness score.
Quotes check
Score:
2
Notes:
The article includes direct quotes from sources such as The Korea Times and Reuters. However, these quotes are from 2024, and no new quotes or information from 2026 are provided. This lack of recent verification raises concerns about the current relevance and accuracy of the information presented.
Source reliability
Score:
4
Notes:
The article cites reputable sources like The Korea Times and Reuters. However, these sources are from 2024, and the article appears to be a republished press release. The lack of independent verification and the reliance on outdated sources diminish the overall reliability of the content.
Plausibility check
Score:
5
Notes:
The article discusses foreign investment outflows from South Korea in August 2024, citing a net outflow of $6.2 billion. While this claim is plausible based on the cited sources, the lack of recent data and independent verification raises questions about the current accuracy and relevance of the information.
Overall assessment
Verdict (FAIL, OPEN, PASS): REVIEW
Confidence (LOW, MEDIUM, HIGH): LOW
Summary:
The article relies on outdated data from August 2024 and appears to be a republished press release without independent verification. The lack of recent information and source independence raises significant concerns about the accuracy and relevance of the content. Given these issues, a thorough review and additional verification are recommended before considering publication.