A growing number of local investors are increasing their holdings of U.S. and Japanese market shares, frustrated by the stagnant performance of Korean bourses, market watchers said Friday.
Jan. 23 data from the Korea Securities Depository showed the number of month-to-date trading of U.S. shares by local retail investors came to 726,573, up 32.5 percent from the previous year.
The comparable figure for Japanese shares came to 17,103 in the same period, up 2.6 times from last year's 6,545.
Partly explaining the surge in overseas investment is local brokerage accounts balance standing at 49.7 trillion won ($37.1 billion) as of Jan. 23, down 2.9 trillion won from the end of last year.
This year, the country's main bourse KOSPI and secondary tech-heavy Kosdaq fell 6.96 percent and 4.94 percent, respectively, whereas the U.S. Nasdaq and Japan's Nikkei rose 3.13 percent and 8.28 percent, respectively.
Korean investors net bought $211 million worth of Microsoft shares. The share price was around $376 as of the end of last year, but they have since climbed to over $403 early this week, up 7.35 percent.
The U.S. IT titan topped $3 trillion in market cap, the first time in 48 years since its establishment buoyed by the recent artificial intelligence (AI) craze.
Tesla was the second-most popular U.S. stock with Korean investors who net bought $148.39 million worth.
The third place was claimed by exchange-traded funds (ETFs) that track the movements of Tesla shares, designed to net profit 1.5 times the U.S. auto titan's share gains. Local investors net bought $52.41 million in the ETF this month.
In Korea, retail investors net bought 1.15 trillion won worth of Samsung Electronics shares this month.
But the share price stands at 74,100 won, a drop of nearly 7 percent from the previous peak of 79,600 won, early this month.
Hi Investment & Securities researcher Park Sang-hyun said the Korean stock market is losing luster with retail investors, especially compared to the U.S. top market-cap shares registering new highs.
"The market cap of the U.S. big tech firms is reaching new highs, all the while the local market sliding without any New Year rallying effect."
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