Foreign capital outflow from S. Korean stock market hits 7-year high in 2018

Source: Xinhua| 2019-01-11 16:50:52|Editor: xuxin
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SEOUL, Jan. 11 (Xinhua) -- Foreign capital outflow from South Korea's stock market hit a seven-year high last year on worries about trade conflict among major economies and the normalized policy rate in the United States, central bank data showed Friday.

Foreign investors dumped a net 5.66 billion U.S. dollars of local stocks in 2018, after purchasing a net 11.45 billion dollars of domestic shares in the previous year, according to the Bank of Korea (BOK).

It was the biggest foreign fund outflow from the South Korean stock market since 2011, posting the first foreign capital outflow in three years.

The foreign fund exodus came on worries about trade conflict among major economies and the U.S. Federal Reserve's hike in its benchmark interest rate, which was raised to a range of 2.25-2.50 percent in December last year.

Foreign capital of 13.91 billion dollars flowed into the domestic bond market as the BOK kept its policy rate relatively low. The BOK's policy rate was lifted only once last year to 1.75 percent. The lower interest rate leads to the higher bond price.