A screen at the dealing room of Hana Bank in Seoul shows the closing prices of the KOSPI, Samsung Electronics and SK hynix, Monday. The KOSPI surged 338.12 points, or 5.12 percent, to close at 6,936.99, breaking above the 6,900 mark for the first time, driven by a rally in semiconductor stocks. Yonhap
Improvements to the omnibus account system for foreign investors earlier this year led to a rise in foreign retail inflows into Korea’s stock market, supporting the KOSPI’s recent upward momentum, market experts said Tuesday.
Korea introduced the omnibus account system in 2017 to facilitate foreign investors' trading of Korea-listed stocks. However, its adoption remained limited due to stringent eligibility criteria and unclear guidelines. To address this, the Financial Services Commission revised the relevant rules earlier this year, scrapping restrictions on account eligibility. The change allows overseas investors to trade Korean stocks directly through offshore brokers without opening separate accounts with local securities firms, significantly improving market access.
“Foreign investors, who had been attracted to Korea’s strong semiconductor earnings and relatively low valuations, previously gained exposure mainly through exchange-traded funds. However, the easing of omnibus account regulations has paved the way for direct inflows of foreign retail capital,” said Kang Jin-hyuk, an analyst at Shinhan Securities.
While the KOSPI’s rally this year has been driven primarily by abundant global liquidity and improved earnings in semiconductors and other key industries, experts underscored that the regulatory changes facilitating foreign inflows have also contributed to the upward momentum.
On Monday, the index jumped more than 5 percent, driven by robust foreign inflows, to close above 6,900 for the first time, edging closer to the 7,000 milestone.
Foreign investors snapped up about 3 trillion won ($2 billion) worth of shares on the main bourse, or about 3.9 trillion won when including the alternative trading platform Nextrade, with purchases concentrated in Samsung Electronics and SK hynix. This marks the largest combined net buying on record.
In line with the KOSPI surge, shares of Samsung Securities also rose by nearly 30 percent, supported by its new linkage service with Interactive Brokers (IBKR), which has opened a test channel for U.S. investors to directly access Korean equities.
Lee Jae-won, an analyst at Yuanta Securities Korea, a unit of Taiwan’s Yuanta Financial, said, “The introduction of IBKR-linked services, which provide a direct route for foreign retail investors to purchase Korean equities, is likely to boost trading turnover and act as a growth driver for brokerage earnings.”
In another bid to further improve foreign investors’ market access, financial authorities have revised guidelines to replace sensitive personal information with encrypted identification numbers.
Source: Korea Times News
