South Korean Investors US Stocks Net Selling Hits $281M as Buying Spree Ends

The four-month buying spree is over. South Korean retail investors, often called 'Seohak Ants,' have flipped to net sellers of U.S. equities for the first time since August. This sudden retreat comes as the government ramps up pressure to keep capital within domestic borders amid a bruising currency crisis.

Understanding the South Korean investors US stocks net selling pivot

According to the Korea Securities Depository (KSD), local investors offloaded a net US$281.4 million of American shares between Dec. 22-26. It's a significant turnaround from the aggressive buying seen throughout the autumn, marking the first net selling week since the third week of August.

Carrots and Sticks: Government Tax Breaks for Reshoring

The Seoul government isn't just asking investors to come home; it's paying them. Last Wednesday, authorities introduced a temporary tax break for individuals who sell overseas holdings and reinvest in the local KOSPI or KOSDAQ markets. Brokerages have also been urged to scale back their marketing of offshore investment products.

Despite these efforts, the 'money move' isn't a slam dunk yet. Kim Jae-eung from Hyundai Motor Securities noted that retail investors also sold 7 trillion won worth of local stocks last week, suggesting a broader move toward cash rather than a simple rotation back to Korea.