Thanks to the strong U.S. economy and improved earnings of semiconductor companies, major countries' stock markets rose, resulting in an increase of $22.47 billion in overseas securities investment balances by major domestic institutional investors last year.
According to the "2023 Foreign Currency Securities Investment Trends of Major Institutional Investors" released by the Bank of Korea on the 28th, the balance of foreign currency securities investments (market value basis) by major domestic institutional investors was recorded at $387.76 billion (approximately 517 trillion KRW) as of the end of last year.
The Bank of Korea explained that the increase in the balance was mainly due to "valuation gains arising from the rise in stock prices of major countries driven by the strong U.S. economy and improved earnings of artificial intelligence (AI) and semiconductor companies, as well as the expansion of equity investments."
During 2023, stock prices in major countries rose significantly compared to the end of the previous year. In the U.S., the Dow Jones Industrial Average increased by 13.7%, and the Nasdaq Composite Index rose by 43.4%. In Europe, the Euro Stoxx 50 went up by 19.2%, and in Japan, the Nikkei 225 index increased by 28.2%.
By institutional investor type, asset management companies increased by $20.08 billion, foreign exchange banks by $4.7 billion, and securities companies by $1.5 billion, while insurance companies decreased by $3.81 billion.
By product type, foreign stocks increased by $23.76 billion. Foreign currency-denominated securities (Korean paper) issued abroad by domestic financial institutions or companies decreased by $40 million, maintaining the level of the previous year-end.
On the other hand, foreign bonds decreased by $1.24 billion, mainly due to insurance companies (-$3.43 billion), despite increased investments by foreign exchange banks and securities companies, due to valuation losses on held bonds.
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