Foreign Securities Investment Balance by Domestic Institutional Investors Increased by 4.84 Billion USD in Q1

Due to the rise in global stock prices, the balance of foreign securities investments by major domestic institutional investors increased by more than $4.8 billion in the first quarter of this year.

On the 1st, the Bank of Korea announced that the balance of foreign securities investments (market value basis) by major domestic institutional investors reached $370.13 billion, increasing by $4.84 billion during the first quarter.

The Bank of Korea explained, "The increase in the balance of foreign securities investments was due to valuation gains from the rise in global stock prices, expectations of easing in the U.S. Federal Reserve's tightening stance, and increased overseas bond investment driven by expectations of falling interest rates."

By type of institutional investor, asset management companies ($5.45 billion), securities firms ($2.37 billion), and foreign exchange banks ($1.7 billion) saw increases, while insurance companies decreased by $4.67 billion.

By product, foreign stocks ($5.06 billion) and Korean Paper ($1.37 billion) increased, whereas foreign bonds decreased by $1.59 billion due to a decline in investment balance caused by insurance companies recognizing bond valuation losses despite the expansion of investment scale.

Foreign stocks increased mainly centered on asset management companies ($5.28 billion) due to valuation gains from rising stock prices in major countries.

In the first quarter of this year, the U.S. Dow Jones Industrial Average rose 0.4% compared to the end of the previous quarter, the Nasdaq increased by 16.8%, and the European index (EuroStoxx50) rose by 13.7%.

Despite increased investments by securities firms and foreign exchange banks, foreign bonds decreased mainly due to insurance companies (-$4.34 billion) recognizing valuation losses following the introduction of the new accounting standard (IFRS 9).