Foreign investors are scurrying to exit the South Korean stock market with a net selling binge, possibly shifting to the Japanese market as a weaker yen whets their investor appetite, analysts said.

Overseas investors sold off local stocks worth a combined net 1.54 trillion won (US$1.45 billion) in the Seoul bourse for the last two weeks, according to the data by the Korea Exchange (KRX).

They sold off a net 490 billion won last Friday, the largest daily net selling since 498 billion won tallied on June 25 last year, the KRX said.

According to Bloomberg data, foreigners unloaded a net $475 million in the local stock market from the beginning of the year to Jan. 24, compared with a strong net buying streak in other emerging markets, including a $2.86 billion net purchase in India.

As of last Friday, South Korea’s benchmark KOSPI fell to 1,964.69 from 2,031.10 in the beginning of this year.

Analysts suspected the latest streak of foreign selling came as investors opted to rake in short-term profit from exchange rates.

As the Japanese yen has seen a rapid fall against the Korean won, foreign money is shifting to the Tokyo market.

“Expectations for an economic recovery run high in Japan now after the Bank of Japan unveiled its expansionary monetary policy,” said Lee Jae-man from Tongyang Securities Co.

“Japanese stocks are climbing on better export forecasts, making the market more attractive for foreigners,” he said.

The Japanese Nikkei has surged 23.18 percent since October last year, while the KOSPI fell 2.48 percent, according to the data.

Also, the decision by U.S. fund manager Vanguard Group Inc. to shift its benchmark index to the FTSE from the MSCI, has been sparking foreigners’ selling mode, analysts said.

Since the Vanguard’s benchmark change, foreigners have been offloading local shares worth around a net 400 billion won on a daily basis, as Vanguard funds need to gradually reduce the portion of Korean stocks in their baskets.

In the last two weeks, tech heavyweight Samsung Electronics Co. saw the largest foreign selloff of a net 463.8 billion won, followed by flat panel giant LG Display with a net 138.2 billion won, according to the data. (Yonhap News)