South Korea's KOSPI rose to and held the 4,000 level for the first time last year and kept climbing, but retail investors posted net selling at a record pace.

Foreigners were the winners in last year's returns, achieving twice the return of retail investors.

According to the Korea Exchange on Wednesday, retail investors were net sellers of 26.37 trillion won in the KOSPI market last year.

That was the largest annual net selling by retail investors in the KOSPI on record. The previous record was 15.55 trillion won in 2012.

The KOSPI rose 75.6 percent last year, ranking first among the Group of 20 stock markets by gains, but retail investors took it as an opportunity to lock in profits and sold heavily.

Foreign investors were also net sellers of 4.66 trillion won over the period. This is analysed as the aftermath of heavy net selling in the first half due to domestic political uncertainty and concerns over tariffs under the U.S. Trump administration.

Institutions, by contrast, were net buyers of 19.69 trillion won in the KOSPI market. Their net buying last year was the second-largest on record.

The largest was 23.26 trillion won in 2008. At the time, the global financial crisis intensified and the stock market wavered.

Returns by investor type showed foreigners had the highest return last year.

The average return of the top 10 stocks foreigners net bought last year was 201.6 percent, 2.3 times the 88.0 percent average return for the top 10 stocks retail investors net bought over the same period.

Institutions also had a higher return than retail, at 132.3 percent.

A closer look at the shopping list shows foreigners, who had the highest return, bought Samsung Electronics the most.

Foreigners' net buying of Samsung Electronics last year amounted to 9.56 trillion won.

They were followed by Korea Electric Power with 1.49 trillion won, Kakao with 942.0 billion won and Hanwha Aerospace with 907.0 billion won.

Retail investors bought Naver the most at 3.36 trillion won, and SK hynix was the second-largest net buy at 2.15 trillion won.

Next came Samsung SDI with 1.82 trillion won, Hanwha Ocean with 1.24 trillion won and Doosan Enerbility with 889.0 billion won.

Institutions drew attention by buying both Samsung Electronics and SK hynix.

Institutions' top two net buys last year were SK hynix and Samsung Electronics, and net buying in SK hynix at 5.43 trillion won was twice that of Samsung Electronics at 2.75 trillion won.

KB Financial Group with 1.70 trillion won and Shinhan Financial Group with 1.37 trillion won were among the top net buys, putting financial shares on the list.

The securities industry advises investors to keep focusing this year on sectors with improving earnings, including semiconductors.

Eun-taek Lee, a researcher at KB Securities, recommended that investors pay attention to semiconductors, power, holding companies and securities firms, saying there is seasonality in which earnings momentum becomes more influential from early in the year.

He cited as grounds that the battery and chemicals sectors should be viewed conservatively early in the year, saying they failed to hold up during a recent correction despite strong performance in the previous rally and earnings estimates are being cut.

[Yonhap]