Foreign Currency Securities Investment Balance of Institutions Increases by $3.3 Billion...Improvement in Investment Sentiment

Foreign Stocks Increase While Foreign Bonds and Korean Bonds Decrease

Due to improved investment sentiment following the resolution of the US debt ceiling negotiations, the balance of foreign currency securities investments by major domestic institutional investors increased by $3.3 billion in the second quarter of this year.

On the 1st, the Bank of Korea announced that the balance of foreign currency securities investments (market value basis) by major institutional investors such as foreign exchange banks, asset management companies, securities firms, and insurance companies in Korea reached $373.43 billion, increasing by $3.3 billion during the second quarter.

The Bank of Korea explained, "The balance increased due to factors such as the easing of financial instability in major countries' banking sectors, an increase in overseas stock investment following the resolution of the US debt ceiling negotiations, and valuation gains from the rise in global stock prices."

By type of institutional investor, asset management companies ($3.69 billion), foreign exchange banks ($640 million), and securities firms ($400 million) saw increases, while insurance companies decreased by $1.43 billion.

By product, foreign stocks ($8.19 billion) increased due to valuation gains from rising stock prices in major countries, but foreign bonds and Korean Paper decreased by $3.87 billion and $1.02 billion respectively. The decline was mainly among asset management companies due to valuation losses caused by rising interest rates in major countries.

In the first quarter of this year, the US Dow Jones Industrial Average rose 3.4% compared to the end of the previous quarter, the Nasdaq increased by 12.8%, the European index (EuroStoxx50) rose 1.9%, and the Japanese Nikkei 225 index increased by 18.4%.

[Image source=Yonhap News]

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