Foreign Investors Return to Korean Stocks and Bonds... $9.12 Billion Net Inflow in September

Net Inflows After One Month
Stock Market Sees $4.34 Billion Net Inflow on Semiconductor Industry Expectations
Bond Inflows Also Expand, Centered on Medium- and Long-Term Bonds

Foreign capital in the domestic securities market turned to a net inflow after one month. This was due to a significant increase in net inflows into the stock market, driven by expectations of an improvement in the semiconductor industry, as well as expanded inflows into bonds, particularly medium- and long-term bonds.

On the 14th, when the KOSPI hit an intraday all-time high, the status board in the dealing room of Hana Bank in Jung-gu, Seoul displayed the KOSPI and the won/dollar exchange rate. On the same day, Samsung Electronics recorded an operating profit of 12.1 trillion won for the third quarter of this year, reclaiming the 10 trillion won level, and its quarterly sales exceeded 80 trillion won for the first time, setting a record high. 2025.10.14 Photo by Jo Yongjun

According to the "Trends in International Finance and Foreign Exchange Markets after September 2025" released by the Bank of Korea on the 15th, foreign capital in the domestic stock and bond markets recorded a net inflow of 9.12 billion dollars last month.

After turning to a net inflow in May, foreign capital continued to increase, but shifted to a net outflow in August. However, it returned to a net inflow after just one month. The scale was also the largest since May (9.29 billion dollars).

Net inflows into stocks amounted to 4.34 billion dollars, the largest since February 2024 (5.59 billion dollars). A Bank of Korea official explained, "The net inflow expanded, especially in the electrical and electronics sectors, due to expectations of an improvement in the semiconductor industry."

Net inflows into bonds reached 4.78 billion dollars. Reflecting some adjustments in the statistics of the integrated government bond account managed by the International Securities Depository Center (ISCD), the actual size is estimated to be 1.3 billion dollars. A Bank of Korea official stated, "Despite large-scale redemptions of government bonds, increased demand for medium- and long-term bonds led to a turnaround to net inflows."

The won/dollar exchange rate rose to 1,402.9 won at the end of September, up from 1,390.1 won at the end of August. A Bank of Korea official explained, "The strengthening of the US dollar was due to the hawkish outcome of the September Federal Open Market Committee (FOMC) meeting, as well as political instability in Japan and France. Additionally, renewed concerns over US-China trade tensions contributed to the rise." The average daily volatility in September was 0.28%, down from 0.42% in the previous month. However, the won/dollar exchange rate has risen further this month, reaching 1,425.8 won as of the 13th.

A Bank of Korea official said, "In the international financial market, investor sentiment remains favorable due to expectations of the US Federal Reserve resuming interest rate cuts and growth in artificial intelligence (AI)-related industries. In the domestic foreign exchange sector, domestic banks' external borrowing conditions continue to remain stable."

This content was produced with the assistance of AI translation services.