Korea Investment & Securities Surpasses 700 Billion KRW in Net Off-Market Bond Purchases for Retirement Pensions

Korea Investment & Securities, a subsidiary of Korea Financial Group, announced on the 24th that the net purchase volume of over-the-counter bonds through retirement pension accounts has exceeded 700 billion KRW this year.

Exterior view of Korea Investment & Securities headquarters. (Provided by Korea Investment & Securities)

As of the 10th, the net purchase amount of over-the-counter bonds through retirement pension accounts surpassed 700 billion KRW. The total cumulative sales reached 1.7725 trillion KRW. The bond ratio within pension accounts also increased from 7.8% at the end of June last year to 12.3% during the same period this year. This is because the sustained high interest rate environment has increased the attractiveness of investing in safe assets. Moreover, trading bonds through defined contribution (DC) type and individual retirement pension (IRP) accounts offers the benefit of deferred taxation on interest income.

The most popular product this year was Treasury Bond 01500-5003 (20-2). This product is a long-term bond with a 30-year maturity and a coupon rate of 1.5%, reflecting expectations of capital gains from interest rate cuts, and sold 178.4 billion KRW in the first half of the year alone. Supported by this, government and public bonds accounted for 58% of the total over-the-counter bond sales in the first half, amounting to 389.1 billion KRW.

Bond trading through non-face-to-face channels was also active. Sales via mobile accounted for 63% of the first half sales, totaling 422 billion KRW. Korea Investment & Securities improved investor accessibility by introducing a mobile over-the-counter bond direct trading service in April last year.

Hong Deok-gyu, head of the Retirement Pension Division, said, "The expectation of interest rate cuts combined with the tax-saving effects through pension accounts is driving the continued growth in retirement pension bond purchases," adding, "We will focus on supplying various high-quality bonds, including long-term government bonds and high-interest short-term bonds, until the end of the year."