Foreign ownership in South Korea's stock market reached 32.9% of total market capitalization in December, the highest level since April 2020. Foreign investors bought a net 3.5 trillion won ($2.4 billion) worth of local shares last month, according to a Korea Center for International Finance report.
The electronics sector attracted 4.5 trillion won in foreign investment, surpassing the overall market total. SK Hynix accounted for 2.2 trillion won of that amount, while Samsung Electronics drew 1.4 trillion won. Foreign ownership in SK Hynix rose to 53.8% from 53.2% in November, with Samsung Electronics increasing to 52.3% from 52.2%.
Foreign investors also purchased 8.8 trillion won worth of domestic bonds in December. The outstanding amount of foreign-held bonds increased from 329.5 trillion won to 339.3 trillion won, driven by medium- and short-term bond purchases.
The KCIF attributed the investment surge to expectations that robust global memory chip demand will benefit Korean semiconductor manufacturers. Government policies aimed at stock market reform and improving corporate value also helped attract foreign capital.
South Korea's benchmark KOSPI index closed at 4,214.17 on December 30, marking a 75.7% gain for 2025. The index later surged past the 4,300 level for the first time, reaching 4,309.63 on Friday.
Separate Financial Supervisory Service data showed foreign ownership at 29.6% in November, compared with 31.5% in April 2020. The FSS has not yet released December figures.
On an annual basis, foreign investors net sold 6.7 trillion won in stocks but invested 64.4 trillion won in bonds during 2025. The KCIF noted that while capital market reforms may drive additional inflows, foreign stock fund flows could face volatility due to concerns about an AI bubble.
