Foreign Investors Turn Net Sellers After a Month, Dump 19.1 Trillion Won of Korean Stocks in September

Net selling on the Kospi alone reached 17.5 trillion won

Bonds also posted net outflows for a second straight month

Foreign investors turned net sellers in South Korea's stock market after one month, unloading more than 19 trillion won of shares in September. Funds also flowed out of the bond market for a second straight month as proceeds from maturing debt exceeded new investment.

According to the Financial Supervisory Service's September 2026 report on foreign securities investment, overseas investors were net sellers of 19.116 trillion won of listed stocks last month. They had been net sellers from January through July before turning net buyers for the first time this year in August, but that shift lasted only a month.

Selling was concentrated in the KOSPI. Foreign investors sold a net 17.453 trillion won on the main board and 1.663 trillion won on the KOSDAQ. About 91% of total net stock selling came from the KOSPI.

By region, Europe recorded the largest net selling at 10.3 trillion won. Investors from the Americas and Asia also sold a net 4.9 trillion won and 1.7 trillion won, respectively. The Middle East, by contrast, was a net buyer of 100 billion won. By country, the U.K. and the U.S. were net sellers of 6.9 trillion won and 3.9 trillion won, respectively. Luxembourg and Ireland were net buyers of 1 trillion won and 800 billion won.

Despite the heavy selling, the value of foreign-held shares increased. Holdings stood at 2,295.967 trillion won at the end of September, up 15.4 trillion won from a month earlier. Foreign investors' share of South Korea's total stock market capitalization was unchanged at 34.8%.

In the bond market, proceeds from maturities outpaced reinvestment. Foreign investors bought a net 127 billion won of listed bonds last month, but received 7.695 trillion won in principal repayments from maturing debt. That resulted in net outflows of 7.569 trillion won.

Bond flows diverged by region. Asia posted net investment of 2.7 trillion won, while Europe recorded net outflows of 6.7 trillion won. The Middle East and the U.S. also pulled out 1.2 trillion won and 800 billion won, respectively. By bond type, 4.8 trillion won flowed out of government bonds and 2.7 trillion won out of special bonds.

Foreign holdings of listed bonds stood at 322.9 trillion won at the end of September, down 7.367 trillion won from a month earlier. Their share of the total listed bond market also fell 0.2 percentage point to 11.2%.

The key issue for future foreign flows will be whether stock selling continues and whether investors reinvest after bond maturities. Market participants say the two markets need to be assessed together, as foreign asset allocation could shift depending on domestic stock-price volatility, global interest-rate expectations and the exchange rate.