Foreign Securities Custody Amount Surpasses $100 Billion 'Record High'... United States Leads with 67.4% '1st Place'

[Asia Economy Reporter Lee Seon-ae] The Korea Securities Depository's foreign currency securities custody amount has surpassed $100 billion for the first time in history.

According to the Depository on the 2nd, as of November 26, the current foreign currency securities custody amount is recorded at $102.1 billion. This represents more than a tenfold growth over the past 10 years since the implementation of the foreign currency securities centralized custody system for general investors in 1994. In particular, it doubled in just 1 year and 5 months after reaching $50 billion in June 2020. The compound annual growth rate (CAGR) over the past three years is 41.2%. This growth is interpreted as a result of the global stock market boom and the expansion of domestic investors' overseas stock investments, such as in the U.S. market, taking advantage of this opportunity.

By product, foreign currency stocks increased by more than 100% over three years, driving the overall custody amount upward, while foreign currency bonds remained stable. By item, since the end of 2020, the top five custody amounts have all been U.S. tech stocks, which currently account for 33.5% of all foreign currency stocks. The current ranking is Tesla ($14.82 billion), Apple ($4.38 billion), Nvidia ($3.02 billion), Alphabet A ($2.20 billion), and Microsoft ($2.08 billion).

By overseas market, custody amounts are in the order of the U.S. (67.4%), Euro market (21.1%), and Hong Kong (3.7%), showing a continuous expansion of U.S. investments.

The foreign currency securities settlement amount is currently $441.2 billion, a 36.4% increase compared to the total of $323.3 billion in 2020. It recorded a high compound annual growth rate (CAGR) of 59.0% over the past three years. By overseas market, settlement amounts are U.S. (76.7%), Euro market (17.4%), and Hong Kong (3.4%), reflecting the active U.S. stock trading trend of domestic investors.

Foreign currency securities investment differs from domestic securities investment in that it involves overlapping operational structures through connections among various domestic and foreign institutions, differences in laws and systems by country, time differences, and exchange rates. Therefore, foreign currency securities investors need to exercise considerable caution, considering the complexity and diversity in trading, settlement, and exercising rights. The Depository has recently produced and distributed leaflets and promotional videos outlining key precautions for individual investors amid the rapid increase in foreign currency securities investment. The Depository stated, "We have made efforts in various ways, including building automated systems, to minimize risks related to foreign currency securities settlement and to safely and efficiently custody domestic investors' foreign currency securities." It added, "We will continue to do our best to expand investment accessibility, establish a stable operational foundation, and build a robust infrastructure for foreign currency securities settlement and custody."

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