Foreigners Buy Bonds and Sell Stocks for Five Consecutive Months

Foreigners' Bond Holdings Reach 146 Trillion Won, a Record High

[Asia Economy Reporter Minji Lee] Foreign investors have sold stocks and purchased bonds in the domestic securities market for the fifth consecutive month. Due to the impact of the novel coronavirus disease (COVID-19), the preference for safe assets has continued, and foreign bond holdings reached a record high of 146 trillion won.

According to the "June Foreign Securities Investment Trends" announced by the Financial Supervisory Service on the 13th, foreign investors sold a net 420 billion won worth of listed stocks last month and made a net investment of 3.436 trillion won in listed bonds. As a result, as of the end of last month, foreigners held a total of 688.2 trillion won in listed securities, including 541.6 trillion won (30.9% of market capitalization) in listed stocks and 146.6 trillion won (7.6% of listed balance) in listed bonds.

In the listed bond market last month, foreign investors made a net purchase of 1.088 trillion won worth of bonds, and despite 665.2 billion won maturing and being repaid, a net investment of 3.436 trillion won was made. This marked the sixth consecutive month of net investment flow since January. With the continuation of the net investment trend, foreign holdings of domestic bonds reached a record high of 146.6 trillion won as of the end of June, an increase of 3.5 trillion won compared to the previous month.

By region, Asia and the Americas made net investments of 3.3 trillion won and 60 billion won respectively, while the Middle East and Europe saw net withdrawals of 300 billion won each. In terms of holding size, Asia had the largest share with 69 trillion won, accounting for 47% of total foreign investment, followed by Europe (45.5 trillion won, 31%) and the Americas (11.4 trillion won, 7.8%).

By type, net investments were mainly made in government bonds (1 trillion won) and Monetary Stabilization Bonds (1.6 trillion won). The holding balance was dominated by government bonds, accounting for 78% at 115.5 trillion won. By remaining maturity, net investments were mainly made in bonds with 1 to less than 5 years (4.1 trillion won) and over 5 years (500 billion won), while net withdrawals occurred in bonds with less than 1 year (1.2 trillion won). The holding balance was highest for bonds with a remaining maturity of 1 to less than 5 years at 53.6 trillion won (36.6%), followed by less than 1 year (34%) and over 5 years (29.4%).

In the domestic listed stock market, foreigners continued to sell, with a net sale of 420 billion won. In the KOSPI market, they sold a net 930 billion won, while in the KOSDAQ market, they made a net purchase of 510 billion won, maintaining five consecutive months of net sales since turning to net sales in February.

By region, Asia and Europe made net purchases of 1.1 trillion won and 700 billion won respectively, but the United States and the Middle East made net sales of 2.6 trillion won and 70 billion won respectively. By country, the United Kingdom (1.7 trillion won), Cayman Islands (800 billion won), and Singapore (700 billion won) made net purchases, while the United States (2.5 trillion won) and Ireland (500 billion won) made net sales.

This content was produced with the assistance of AI translation services.