The Bank of Korea, 'Foreign Securities Investment Trends of Major Institutional Investors in Q1'
Due to the rise in global stock prices, the balance of overseas foreign currency securities investments by major domestic institutional investors increased by $9.02 billion during the first quarter.
According to the "Trends in Foreign Currency Securities Investment by Major Institutional Investors in the First Quarter" released by the Bank of Korea on the 31st, the balance of foreign currency securities investments (market value basis) by major domestic institutional investors stood at $396.77 billion as of the end of March, up $9.02 billion during the first quarter.
The balance of overseas foreign currency securities investments by domestic institutional investors decreased by $6.57 billion in the third quarter of last year compared to the previous quarter, then increased significantly by $20.88 billion in the fourth quarter, showing an upward trend for two consecutive quarters.
A Bank of Korea official explained the reason for the increase in the balance, saying, "Valuation gains occurred due to the rise in global stock prices, and new equity investments also expanded," adding, "Bond investments also slightly increased due to expectations of the Federal Reserve's policy rate cuts and banks' management of foreign currency liquidity ratios."
By type of institutional investor, asset management companies ($6.93 billion), foreign exchange banks ($2.23 billion), and securities companies ($1.03 billion) saw increases, while insurance companies decreased by $1.17 billion.
By product, foreign stocks increased significantly. Foreign stocks rose by $8.68 billion compared to the end of the previous year due to valuation gains from rising stock prices in major countries combined with net investments.
During the first quarter, major stock indices showed an upward trend. The U.S. Dow Jones Industrial Average changed by 5.6%, the Nasdaq Composite Index by 9.1%, the European Euro Stoxx 50 Index by 12.4%, and the Japanese Nikkei 225 Index by 20.6%.
Foreign bonds slightly increased by $208 million due to net investments by foreign exchange banks for managing foreign currency liquidity ratios, despite valuation losses from rising interest rates in major countries such as U.S. Treasury yields.
Foreign currency-denominated securities issued abroad by domestic financial institutions or companies (Korean paper) increased by $50 million due to net investments by foreign exchange banks and other factors.
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