Seoul: Foreign ownership as a share of total market capitalization reached its highest level in five years and eight months in December amid a rally in the South Korean equity market, a report showed Sunday.

According to Yonhap News Agency, foreigners purchased a net 3.5 trillion won (US$2.4 billion) worth of local shares in December, increasing their stockholdings to 32.9 percent of total market capitalization. This marks the highest level of foreign ownership since April 2020, as highlighted by a report from the Korea Center for International Finance (KCIF).

Separate data from the Financial Supervisory Service (FSS) revealed that foreign ownership was at 29.6 percent as of November, compared to 31.5 percent in April 2020. The FSS has not yet released its figures for December.

The KCIF report stated that foreign investors acquired a net 4.5 trillion won worth of shares in the electronics sector during December. This included significant investments of 2.2 trillion won in SK hynix and 1.4 trillion won in Samsung Electronics.

Consequently, foreign ownership of SK hynix increased to 53.8 percent in December from 53.2 percent in November, while foreign holdings in Samsung Electronics rose to 52.3 percent from 52.2 percent over the same period.

In the bond market, foreign investors bought a net 8.8 trillion won worth of bonds last month, as reported by the KCIF.

The KCIF attributed the significant rise in foreign investment to expectations that strong global demand for memory chips will favor South Korean chipmakers. Additionally, policies by the Seoul government aimed at reforming the stock market and enhancing corporate value also contributed to attracting foreign investors.

South Korea's benchmark stock index closed at 4,214.17 on December 30, the last trading day of 2025, reflecting a 75.7 percent increase compared with the first trading day of the year.