Overseas Investors Boost Korean Bond, Stock Holdings in October

Global funds boosted their holdings of South Korea’s local-currency bonds and stocks last month, after cutting their holdings in September, according to data released today by the financial regulator.

The amount of bonds owned by overseas investors rose by 1.6 trillion won ($1.4 billion) to a record 86.7 trillion won, the Financial Supervisory Service said in an e-mailed statement today. That’s equivalent to 7.3 percent of the nation’s debt.

U.S. investors were the biggest buyers with their ownership increasing by 788.1 billion won, while Malaysian funds boosted holdings by 508.7 billion won, FSS data showed. Funds based in Europe reduced their holdings by 217.3 billion won in October after cutting by 2 trillion won in September, the regulator said.

Overseas investors bought 1 trillion won more of the nation’s stocks than they sold in October, the first net purchases in three months, according to the FSS. Investors based in Singapore were the biggest buyers, followed by those in the U.K. and the U.S., it said.

The won strengthened 6.1 percent in October, its biggest monthly advance since April 2009, according to data compiled by Bloomberg. The nation’s benchmark three-year bond yield fell three basis points to 3.51 percent and the Kospi Index (KOSPI) of shares gained 7.9 percent, Korea Exchange Inc. prices show. A basis point is 0.01 percentage point.

To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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