Domestic Institutions' Overseas Securities Investment Balance Down by $11.28 Billion... Largest Drop in 9 Years

(Data provided by Bank of Korea)

In the first quarter of this year, the balance of foreign securities investments by major domestic institutional investors decreased by more than approximately 14 trillion won compared to the previous quarter.

On the 2nd, the Bank of Korea announced in its 'Trends in Foreign Securities Investments by Major Institutional Investors' that as of the end of March, the balance of foreign securities investments (market value basis) by major institutional investors in South Korea was $395.88 billion, a decrease of $11.28 billion (-2.8%, approximately 14.0842 trillion won) during the first quarter.

This is the largest decline since the second quarter of 2013, when the balance of foreign securities investments decreased by $2.19 billion (-3.2%).

The Bank of Korea explained, "Although net investments increased due to the rise in overseas fund subscriptions by asset management companies, the balance decreased due to valuation losses caused by rising global bond yields and falling stock prices."

By institutional investor type, insurance companies (-$7.38 billion), asset management companies (-$2.93 billion), securities firms (-$930 million), and foreign exchange banks (-$40 million) all saw decreases in their investment balances.

By product type, foreign bonds (-$6.74 billion), Korean Paper (-$3.08 billion), and foreign stocks (-$1.46 billion) decreased in that order.

In the case of foreign bonds, valuation losses due to rising global bond yields led to large decreases for insurance companies (-$5.01 billion) and asset management companies (-$1.9 billion). The 10-year U.S. Treasury yield rose by 0.83 percentage points from 1.51% at the end of last year to 2.34% at the end of March this year.

Korean Paper saw a significant decrease centered on insurance companies (-$1.95 billion), due to valuation losses from rising interest rates combined with bond sales by some insurance companies.

Foreign stocks decreased mainly among asset management companies (-$580 million) and securities firms (-$570 million) due to valuation losses from falling stock prices in major countries.

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