South Korean investors are rapidly turning their attention to US equities amid mounting concerns over the local stock market’s instability and political uncertainty. The trend is evident despite the weakening Korean won, which has raised the cost of cross-border trading.
Surge in US Stock Investments
According to the Korea Securities Depository, South Korean investors traded $63.49 billion worth of US stocks in November, marking the highest monthly figure since the institution began tracking the data in 2011. This figure significantly surpassed the previous record of $51.95 billion set in July.
Tesla remained the top choice for Korean investors, with trading volumes reaching $7.7 billion last month. The electric vehicle giant has become synonymous with what market watchers describe as the “Trump trade,” following bullish sentiment tied to the US election results.
Declining Interest in Kospi
Meanwhile, the local stock market has experienced an exodus of retail investors. Last week, South Korean investors offloaded a net 1.23 trillion won ($856 million) worth of shares on the Kospi and further dumped 885 billion won on Monday alone. The benchmark Kospi closed at 2,360.58, slipping below the 2,400 mark.
Analysts believe President Yoon Suk Yeol’s unexpected declaration of martial law has heightened market volatility, prompting investors to seek safer or more lucrative opportunities abroad.
Currency Challenges
The depreciation of the Korean won has emerged as a critical factor complicating cross-border investments. The won’s value against the US dollar plunged to 1,437 won during intraday trading on Monday and failed to recover by the close of trading.
Following the martial law announcement, data showed a decline in US stock trading activity among Korean investors. On Thursday, purchases of US shares fell by 6.4% to $1.3 billion, and by Friday, they dropped further to $1.12 billion — a 14% decrease from earlier in the week.
“The won-dollar exchange rate is likely to remain volatile in the 1,400 range as political chaos persists and discussions around Yoon Suk Yeol’s impeachment unfold,” said Lee Jae-man, an analyst at Hana Securities.
Crypto Markets Offer Alternatives
As the stock market struggles, Korean investors have increasingly turned to cryptocurrencies in pursuit of higher returns. Despite initial sell-offs following the martial law declaration, bitcoin prices rebounded sharply. Bitcoin, which briefly dipped to 88 million won, surged back to the 130 million won range and traded at 139 million won as of 4:40 p.m. on Upbit, South Korea’s largest cryptocurrency exchange.
The 24-hour transaction volume across the top five domestic crypto exchanges — Upbit, Bithumb, Coinone, Korbit, and Gopax — reached $14.59 billion on Friday. This figure nearly doubled the Kospi’s daily trading volume of 10.48 trillion won, underscoring the growing shift toward alternative investments.
As political and economic uncertainties persist, South Korean investors are increasingly looking abroad and into non-traditional markets to navigate the challenges at home.
