South Korea drew the most foreign capital in the emerging market category this month despite tensions with Japan adding to trade woes weighing over the Korean Inc. and economic outlook.

Foreign net buying of Korean shares reached $832 million from July 1 to 19, according to data released by Yuanta Securities Korea Co. on Monday, the highest among 10 major emerging markets. It was followed by Thailand who saw overseas investors net purchase $613 million worth local stocks over the period, Indonesia $180 million, Vietnam $82 million, the Philippines $81 million, Sri Lanka $45 million and Pakistan $15 million.

On the contrary, the Indian market saw a net selling of $1.04 billion by offshore investors during the same period, and the Taiwanese and Brazilian markets also witnessed foreign investors unload a net $682 million and $496 million worth local stocks, respectively.

Despite unfavorable conditions caused by the drawn-out trade war between the United States and China and mounting trade dispute with Japan at home, foreign capital influx to the Korean stock bourses has been on the steady rise since the beginning of the month, with $35 million flowing in the first week, $523 million in the second and $274 million in the third.

The nation’s sole stock exchange operator Korea Exchange found that overseas investors net purchased 1.19 trillion won ($1.01 billion) worth Korean stocks on the main Kospi market from July 1 to 19 while net sold $206.8 billion won worth shares on the secondary Kosdaq bourse, which resulted in a net buying of 987.8 billion won over the period.

The buying spree on the Kospi was mostly led by heated appetite for chip-making heavyweights, with Samsung Electronics seeing foreign net purchase of 895.2 billion won and SK Hynix 269 billion won. Although Japan’s export restrictions targeted the chipmakers, foreign investors stocked up investment in the two on view that their bottom line will be helped by recovery in international prices amid fears of reduced supplies. The strengthening in the won also added appeal to Korean assets.

By Chung Seung-hwan and Choi Mira

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]