Foreigners Switch to Net Bond Investment in One Month... Also Net Buying Stocks

[Asia Economy Reporter Ji Yeon-jin] Last month, foreigners made a net investment of over 3 trillion KRW in domestic listed bonds. This marked a shift to net investment just one month after foreign funds exited the bond market in June. Domestic listed stocks also turned to net buying after seven months.

The Financial Supervisory Service announced on the 12th that in July, foreigners made a net purchase of 245 billion KRW in listed stocks and a net investment of 3.561 trillion KRW in listed bonds, totaling a net investment of 3.806 trillion KRW. In domestic stocks, foreigners net bought 1.131 trillion KRW in the KOSPI market but net sold 886 billion KRW in the KOSDAQ market.

As of the end of last month, foreigners held approximately 630.4 trillion KRW worth of listed stocks, accounting for about 26.4% of the total market capitalization. They also held about 233.5 trillion KRW worth of listed bonds, which is 10.0% of the outstanding listed bonds, totaling 863.9 trillion KRW in listed securities.

In domestic stocks, foreigners net bought 1.7 trillion KRW in the Americas region and 500 billion KRW in Asia, while net selling occurred in Europe (-1.9 trillion KRW) and the Middle East (-100 billion KRW). The United States (1.7 trillion KRW) had the largest net purchase, followed by Singapore (400 billion KRW). Conversely, the United Kingdom (-1 trillion KRW) and the Netherlands (-400 billion KRW) were net sellers.

As of the end of last month, the United States held approximately 259.9 trillion KRW worth of domestic stocks, accounting for 41.2% of the total foreign holdings. Europe (188.7 trillion KRW), Asia (8.85 trillion KRW), and the Middle East (20.5 trillion KRW) followed in order.

In listed bonds, foreigners made a net purchase of 6.156 trillion KRW and redeemed 2.595 trillion KRW at maturity, resulting in a net investment of 3.561 trillion KRW. As of the end of last month, foreigners held 233.5 trillion KRW in listed bonds, an increase of 4.6 trillion KRW compared to the previous month. The month-end holdings of foreigners have continuously set record highs since January last year.

Net investments were made in Asia (2 trillion KRW), the Americas (700 billion KRW), and the Middle East (300 billion KRW), while Europe saw a net withdrawal of about 900 billion KRW. Asia accounted for 104.8 trillion KRW, or 44.9% of total foreign holdings, followed by Europe with 72.8 trillion KRW (31.2%).

Last month, foreigners made a net investment of about 2.6 trillion KRW in government bonds and a net withdrawal of 300 billion KRW in Monetary Stabilization Bonds. As of the end of last month, foreigners held 187.6 trillion KRW (80.3%) in government bonds and 44.9 trillion KRW (19.2%) in special bonds.