Institutional Overseas Securities Investment Balance Down 5%...Losses Increase Due to Stock Price Decline and Bond Yield Rise

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[Asia Economy Reporter Seo So-jung] The foreign currency securities investment balance of institutional investors such as foreign exchange banks, asset management companies, securities firms, and insurance companies in South Korea decreased by 5.0% in the third quarter. This was due to rising global bond yields and increased valuation losses caused by stock price declines.

According to the trends in foreign currency securities investment by major institutional investors in the third quarter, published by the Bank of Korea on the 2nd, the foreign currency securities investment balance of institutional investors at the end of September was $354.93 billion based on market valuation, down $18.69 billion (5.0%) compared to the second quarter.

By type of institutional investor, asset management companies (-$14.62 billion), insurance companies (-$3.88 billion), and securities firms (-$1.14 billion) decreased, while foreign exchange banks (+$950 million) increased.

By product, foreign stocks (-$10.4 billion), foreign bonds (-$6.59 billion), and foreign currency-denominated securities (Korean paper, -$1.7 billion) decreased in that order.

Foreign stocks decreased mainly due to valuation losses from stock price declines in major countries, centered on asset management companies (-$9.73 billion).

Foreign bonds decreased mainly due to valuation losses from rising global bond yields, centered on asset management companies (-$4.47 billion) and insurance companies (-$2.91 billion).

Korean paper, issued by domestic financial institutions or companies abroad, decreased mainly due to valuation losses from rising interest rates and the added effect of bond sales by some securities firms, centered on securities firms (-$850 million).

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