Korean retail investors in Chinese and Hong Kong stocks keep selling for five straight months

Korean retail investors have continued to sell Chinese stocks since late last year. Even as Chinese markets rebounded last month, funds from Korean retail investors in Chinese and Hong Kong stocks kept flowing out. According to Save-ro data from KSD on the 5th, individual investors recorded net selling of Chinese stocks for five consecutive months from December last year through April this year.
Monthly net selling widened from $18.15 million in December last year to $40.23 million in March, before easing slightly to $25.45 million last month. Still, the overall selling trend has continued. Top stocks in settlement-based selling included Cambricon Technologies, BYD Company Limited (BYD), and Kweichow Moutai, among other major Chinese technology and consumer names. Individual investors appear to be taking profits not only in small- and mid-cap stocks, but also in large-cap market leaders.
Custody holdings are also declining. The value of Chinese stock holdings fell about 6% from $918.48 million in December last year to $863.29 million last month. In March alone, the figure dropped about 11% from the previous month, marking a sharp decline. It edged up again last month, but that was attributed to higher share prices rather than fresh net buying. In other words, both trading activity and outstanding balances are shrinking at the same time.
Market trends, however, have moved in the opposite direction from individual investors' behavior. The SSE Composite Index rose 2.06% in December last year, followed by gains of 3.76% in January and 1.09% in February, extending a gradual uptrend. It fell 6.51% in March, but rebounded 5.66% last month, recovering most of the losses.