* Record $240 mln spent buying mainland China stocks in
7-fold jump on year
* China tech rally, tough investment curbs at home drive
* Shennan Circuits, ZTE, Inspur among top picks
* China tech stocks popular with Korean investors up 32%
SEOUL/SHANGHAI, Aug 21 (Reuters) - South Korean retail
investors are stampeding into Chinese stocks in record numbers,
ploughing hundreds of millions of dollars into a tech sector
rush far removed from punishing taxes and regulations on
investment at home.
In July alone, South Korean investors spent $240 million
buying shares in mainland China, data from the Korea Securities
Depository (KSD) showed - their largest investment in mainland
markets on record.
That's a seven-fold jump from $32.9 million in July last
year, and accounts for a third of the total $719 million net
investment in China stocks for the January-July period.
While South Korean mom and pop investors have historically
been big risk-takers, they have stepped up the hunt for assets
overseas as the Korean government imposes stringent mortgage
rules and proposals to impose capital gains tax on local stocks.
Among them is the Kim, a 40-year-old Seoul chef with more
invested than 500 million won - nearly half a million dollars -
in Chinese stocks. Like others, Kim, who declined to given his
forename, is betting on Beijing's push for tech self-sufficiency
to counter U.S. trade sanctions and bans.
"It is true that interest in Chinese stocks has increased
more than ever, driven by tightened regulations on domestic
stocks and a boom in the China market unseen since 2015," said
The United States remains a top destination for investors
like Kim, with Korean investments there a net $2.27 billion in
July, followed by $475 million in Hong Kong, out of a total
$3.19 billion of overseas stock buying.
But they are also being lured by the promise of China'
speedy economy recovery from the coronavirus pandemic and its
rising stock market - China's tech-heavy start-up board
ChiNext and its STAR Market are up about 40%
each this year.
Overseas stocks make up about 80% of Kim's equity holdings,
with 90% of that chunk allotted to China and the rest to U.S.
equities. Kim plans to park all his equity investments overseas,
and is particularly bullish on the Chinese economy and mainland
companies with high growth potential.
KSD data showed six of the 10 top Chinese companies that
Korean investors bought between January and July were tech
companies, with Shennan Circuits Co Ltd, a supplier
to giant tech firm Huawei supplier, taking the lead
with $55.36 million net.
ZTE Corp was also high on Korean investment
list, along with Inspur Electronic Information Technology Co Ltd
, Will Semiconductor Co Ltd and Luxshare
The average year-to-date performance of those six shares
shows a spurt of 32%, compared with declines of 0.7% and 23.7%
respectively for Korean tech heavyweights Samsung Electronics Co
Ltd and SK Hynix Inc.
What's more, the broader Shanghai Composite index is
up 10.3%, while Seoul's KOSPI benchmark has gained only
($1 = 1,187.3300 won)
(Reporting by Joori Roh in Seoul and Luoyan Liu in Shanghai;
Editing by Vidya Ranganathan and Kenneth Maxwell)