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Institutions' investment in foreign securities down in Q1

Finance 12:00 June 01, 2020

SEOUL, June 1 (Yonhap) -- South Korean institutions' investment in foreign securities dropped in the first quarter, central bank data showed Monday, partly due to a market slump caused by the COVID-19 pandemic.

The combined value of overseas stocks and bonds held by South Korean institutions came to US$317.8 billion as of end-March, down $9.61 billion from three months earlier, according to the data from the Bank of Korea (BOK).

The drop marks a sharp turnaround from a $14.6 billion on-quarter spike posted in the last three months of 2019.

In the photo, taken May 28, 2020, electronic signboards at a KB Kookmin Bank trading room in Seoul show South Korea's benchmark Korea Stock Price Index (KOSPI) closed lower, while the local currency fell against the U.S. dollar amid the lingering fallout from the COVID-19 pandemic. (Yonhap)

Such a decline is "largely attributed to a dip in stock prices of major countries due to the spread of the new coronavirus, while demand for overseas bonds also dwindled," the BOK said.

Investment in foreign stocks slipped $5.15 billion to some $102.3 billion in the three months ended March 31, with investment in overseas bonds dipping $4.94 billion to $172.7 billion, according to the BOK.

Investment in Korean papers, foreign currency-denominated securities issued by South Korean governments, banks and companies in overseas markets came to $42.83 billion as of end-March, up $480 million from three months earlier.

By institution, foreign securities held by asset management firms came to $184.9 billion, down $7.31 billion, with those held by insurance companies and securities firms coming to $85.4 billion and $21.1 billion, respectively, down $2.32 billion and $10 million.

The COVID-19 pandemic has adversely affected nearly all major stock markets throughout the globe, including those of South Korea.

The BOK has said foreign investors here had net sold nearly $5.3 billion worth of local stocks and bonds in the January-March period, dumping over $11 billion worth of local shares in March alone, marking the largest monthly sell-off since the BOK began compiling such data in January 2007.

South Korea has reported some 11,400 infection cases since reporting its first confirmed case on Jan. 20.

bdk@yna.co.kr
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