US remains largest holder, Ireland leads net purchases
Foreign investment in Korean equities skyrocketed in 2025, nearly doubling as the KOSPI index led global markets in growth, resulting in a massive increase in market value. This upward trend continues as the index shows no signs of slowing down.
Data from the Financial Supervisory Service released Wednesday reveals that overseas investors held 1,326.8 trillion won ($918.9 billion) worth of shares listed on Seoul markets at the end of December, a significant 97 percent increase from 673.7 trillion won the previous year.
This substantial growth occurred despite foreign investors posting net sales of 11.8 trillion won throughout the year. The KOSPI’s impressive surge of approximately 76 percent—the highest among major global markets—more than compensated for these outflows, significantly boosting the value of retained holdings.
Foreign ownership as a percentage of total market capitalization rose to 30.8 percent, up from 27 percent a year prior, according to the data.
American investors saw their holdings nearly double, jumping from 272 trillion won at the end of 2024 to 546 trillion won a year later. Their share of total foreign ownership also increased slightly, from 40.4 percent to 41.2 percent, further solidifying their dominant position.
Investors based in the United Kingdom held the second-largest amount, with 144 trillion won in holdings, followed by Singapore at 88 trillion won, Luxembourg at 70 trillion won, and Ireland at 58 trillion won.
In terms of net flows, Ireland emerged as the largest buyer with net purchases of 7 trillion won, followed by the US with 5.8 trillion won. The UK was the largest seller, with net sales totaling 11.1 trillion won.
UK investors also dominated trading activity, recording total transactions of 1,031 trillion won, consisting of 519 trillion won in sales and 511 trillion won in purchases. They accounted for a significant 46 percent of the total foreign trading volume in Korean equities last year.
This positive momentum continued into 2026. Foreign holdings rose to 1,701 trillion won by the end of January, a 28 percent increase from the previous month, despite net foreign selling of 98 billion won.
During January, foreigners made net purchases of 361 billion won on the KOSPI and net sales of 459 billion won on the KOSDAQ. Ireland led purchases with 233.2 billion won, followed by the UK with 175.8 billion won. US investors, however, offloaded a net 779.5 billion won, marking their fourth consecutive month of net selling.
Foreign ownership as a percentage of market capitalization increased by 1.2 percentage points to 32 percent.
The KOSPI experienced a surge of 24 percent in January, breaking the 5,000 mark for the first time on January 22 and adding approximately 500 points in the subsequent two weeks. The KOSDAQ also rose by 24 percent, building on its strong 37 percent rally in 2025.
This surge in the Korean stock market has driven up valuations across the board. Forty-two stocks exceeded the 1 trillion won market capitalization threshold in January, bringing the total to 365, a 13 percent increase from the previous month. The number of stocks with a market capitalization above 10 trillion won increased by 12, reaching 74, including 10 from the KOSPI and two from the KOSDAQ.
Notably, Samsung Electronics surpassed 1,000 trillion won in market value in January, becoming the first Korean company to achieve this milestone.
On Friday, the benchmark KOSPI reached an all-time intraday high of 5,583.74 before closing almost flat at 5,507.01.
As of Friday’s close, the KOSPI and KOSDAQ had gained 30.7 percent and 19.5 percent, respectively, since the end of 2025, making them the top and third-best performers among major global markets year-to-date. Turkey followed with a 26 percent advance, while Brazil and Taiwan posted gains of more than 16 percent.
While foreign demand softened late in 2025—ending a six-month streak of net buying on the KOSPI and resulting in net selling for the year—many analysts anticipate stronger foreign inflows throughout 2026.
JPMorgan, which recently raised its 2026 KOSPI target to 6,000 in its base case and 7,500 in its bull case, noted that foreign positioning remains “lukewarm,” suggesting significant potential for renewed inflows.
Kim Yong-gu of Yuanta Securities also highlighted stronger foreign participation as a key driver, stating that “Korea’s differentiated overweight status within global and emerging markets should attract additional inflows,” and raised his KOSPI target range to 5,000 to 6,300.
jwc
