Domestic Institutions' Overseas Securities Investment Balance Hits $369.3 Billion... Record High

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] Last year, the balance of overseas foreign currency securities investments by domestic institutional investors increased by more than 40 billion dollars.

According to the Bank of Korea on the 26th, the balance of overseas foreign currency securities investments (market value basis) by major domestic institutional investors stood at 369.3 billion dollars at the end of last year, up 41.8 billion dollars from a year earlier. This was due to continued demand for overseas stock investments, mainly by asset management companies.

In particular, in the fourth quarter of last year, the investment balance increased by 23.9 billion dollars, the largest level since the statistics were reorganized in the fourth quarter of 2006.

A Bank of Korea official explained, "Due to COVID-19, stock prices fell significantly across all markets but rose as the second half of the year progressed," adding, "This also includes the effect of price fluctuations."

By institutional investor type, the investment balances increased for asset management companies (+39.2 billion dollars), insurance companies (+0.4 billion dollars), and foreign exchange banks (+2.4 billion dollars). Securities companies decreased by 0.2 billion dollars.

By category, the investment balance increased by 34.4 billion dollars in foreign stocks and 7.7 billion dollars in foreign bonds. In particular, stocks saw an increase of 19.2 billion dollars in investment balance during the fourth quarter alone as major countries’ stock prices rose. The increase during the fourth quarter was the largest since the statistics were reorganized in the fourth quarter of 2006.

The investment balance of foreign currency-denominated securities (Korean paper) issued abroad by Korean financial institutions or companies decreased by 0.31 billion dollars, mainly due to asset management companies (-0.85 billion dollars) and insurance companies (-0.81 billion dollars).

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