Foreign capital selling tens of billions of Korean stocks, institutions still optimistic about the Korean market.

So far this year, despite the South Korean Composite Stock Price Index reaching a record high in terms of annual increase and ranking among the best performing stock indices globally, foreign funds are still heavily selling off South Korean stocks, with the cumulative outflow of funds reaching tens of billions of dollars. Data from the South Korean Exchange shows that as of 11 AM on Monday Singapore time, foreign funds have sold a net amount of 1.24 trillion South Korean won in stocks included in the Composite Index. However, many investors and market strategists believe that the reason for the foreign selloff is not due to a weakening of the South Korean economy's fundamentals, but rather a result of the sharp increase in the stock market. Chetan Seth, a stock strategist at Nomura Securities Asia Pacific, said, "We observe that at present, foreign funds are mostly passively reducing their holdings." Interviewed investors revealed that with the significant increase in South Korean stocks, their weight in global and emerging market indices has sharply risen. To comply with portfolio rules and control risk exposure, many active fund managers have had to reduce their positions in South Korean stocks. The foreign selloff trend has been ongoing for several months. Goldman Sachs estimates that as of the end of May, total foreign outflows from the South Korean Composite Index market amounted to approximately $62 billion. Seth from Nomura Securities stated, "I do not believe that foreign funds are bearish on the South Korean market. The current reduction in holdings is simply a passive technical adjustment."