Overseas investors bought a record $3.6 billion of South Korean equities this week as the nation’s economic outlook improved.
Global funds acquired more local equities than they sold for a 16th straight day today, the longest run of net purchases since December 2012, data compiled by Bloomberg show. The Kospi completed its third week of gains after touching the highest level since March yesterday, when the won climbed to its strongest level against the dollar since February.
South Korea’s economy grew 1.1 percent in the second quarter from the preceding three months, the most in more than two years, central bank data showed Sept. 5. Exports, which account for around half of GDP, jumped 7.7 percent in August, the most since January, official data show. The finance ministry said today it will focus on boosting jobs and investment to aid the recovery.
“It’s been a long time since foreigners bought such a large amount of South Korean equities,” Heo Pil Seok, chief executive officer at Midas International Asset Management Ltd., which oversees about $6.4 billion, said from Seoul.
The benchmark Kospi index gained 2 percent this week, paring its year-to-date loss to 0.1 percent. Foreign money managers bought $5.1 billion worth of Korean shares so far this month, the most among 10 Asian markets tracked by Bloomberg.
South Korea’s economy is showing a gradual recovery and the government will focus on creating jobs and easing rules to to boost investment, according to a finance ministry report presented to parliament today. Asia’s fourth-largest economy expanded 2.3 percent in the second quarter, official data show.
The Bank of Korea kept its seven-day repurchase rate at 2.5 percent yesterday, the lowest since 2010.
To contact the reporter on this story: Sharon Cho in Seoul at email@example.com