End-June balance reaches $549.7 billion

People stand outside the NASDAQ MarketSite in New York. [AP]
People stand outside the NASDAQ MarketSite in New York. [AP]

A sharp rally in US and other major equity markets drove South Korean institutional investors' overseas foreign-currency securities holdings to a record quarterly growth rate in the second quarter of this year.

The Bank of Korea released data Tuesday on foreign-currency securities investment trends among major institutional investors in the second quarter. The total balance of such holdings, measured at market value, stood at $549.68 billion as of end-June.

That marked a 9.3 percent increase, or $46.72 billion, from $502.96 billion at end-March — the largest quarterly gain since the Bank of Korea began compiling the data in 2014.

The balance had risen for four consecutive quarters starting in the first quarter of last year before dipping in the first quarter of this year, then rebounding in the latest period.

By investor type, asset management companies led the increase with a gain of $44.66 billion, followed by foreign exchange banks at $2.81 billion and securities firms at $100 million. Insurance companies bucked the trend, posting a decline of $840 million.

By asset class, foreign equities surged $45.76 billion — also a record quarterly increase — while foreign bond holdings held steady at roughly the previous quarter's level.

Foreign-currency-denominated securities issued abroad by domestic financial institutions and companies, known as "Korean paper," rose by $960 million.

The Bank of Korea said valuation gains from rising share prices in major markets boosted the balance, with net investment in foreign equities continuing to be led by asset management companies. It added that foreign bond holdings were little changed as caution over falling bond prices amid rising interest rates was offset by bargain-hunting demand.


kimstar@heraldcorp.com