Foreign investors pulled a record $32.4 billion from South Korean stocks in June, marking the largest monthly equity withdrawal in history. The capital flight came after a sharp rally in local markets and a broader shift in global portfolio strategies, according to data released by the Bank of Korea.
Net outflows hit $30.72 billion
The Bank of Korea reported that foreign investors recorded a net outflow of $30.72 billion from Korean securities during June. This figure includes both stocks and bonds, though the majority of the movement was concentrated in equities. The outflow represents the second-largest monthly total on record, trailing only March’s $36.55 billion withdrawal.
Using the end-June exchange rate of 1,548.7 won per U.S. dollar, the June outflow is equivalent to approximately 47.6 trillion won. This massive figure highlights the scale of the sell-off, which has now continued for five consecutive months, beginning in February. For the first half of 2026, cumulative net foreign securities outflows reached $100.93 billion.
Foreign investors have now been net sellers of Korean equities for six straight months, starting in January. The total value of these cumulative equity outflows during the first half of the year stood at $110.21 billion. This amount is more than 15 times larger than the $7.07 billion net outflow recorded during all of 2025, a period that included a global pandemic.
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Bond markets see inflows
While stock markets faced heavy selling pressure, foreign investors remained net buyers of Korean bonds. Bond investment recorded a net inflow of $1.65 billion in June. This brings the total for the month to a three-month streak of inflows, which began in April. However, the amount was lower than May’s $5.68 billion net inflow. For the first half of the year, foreign investors recorded a cumulative net bond inflow of $9.28 billion.
Officials attribute the recent equity outflows to a combination of factors. “The increase in equity outflows reflected weaker investor sentiment amid growing concerns over global AI-related investments, combined with portfolio rebalancing following the strong rally in Korean equities,” said a Bank of Korea official. The official noted that the sell-off is not merely profit-taking but reflects deeper structural concerns.
Market analysts warn that the current trend could trigger a negative feedback loop. “It may be a warning sign that the attractiveness of the Korean stock market has reached its limits,” a financial industry official said. “Preemptive measures are urgently needed to prevent a vicious cycle of a weakening won and continued capital outflows.”
