Institutional Overseas Securities Investment $8.38 Billion ↑... Impact of Stock Price Increase

Stock Prices Rise Due to Improved Earnings of AI and Semiconductor Companies
Overseas Stock Investment Balance Increases by $9.01 Billion

The balance of overseas securities investments by institutional investors in South Korea increased by $8.38 billion during the second quarter. This was due to a significant rise in overseas stock investment balances, centered on asset management companies, as net investments and valuation gains increased following the stock price rises in major countries driven by improved earnings of artificial intelligence (AI) and semiconductor companies.

[Image source=Yonhap News]

According to the "2024 Q2 Trends in Foreign Currency Securities Investment by Major Institutional Investors" released by the Bank of Korea on the 29th, the balance of foreign currency securities investments (at market value) by institutional investors such as foreign exchange banks, asset management companies, securities firms, and insurance companies in South Korea stood at $405.32 billion at the end of June, marking an increase of $8.38 billion during the second quarter. The growth rate slowed compared to the first quarter ($9.18 billion).

The balance of overseas securities investments by institutional investors decreased by $6.57 billion in Q3 last year but has steadily increased for three consecutive quarters since Q4 last year ($20.88 billion) and Q1 this year ($9.18 billion).

This is attributed to a significant increase in foreign stock investments ($9.01 billion), mainly by asset management companies, as net investments and valuation gains rose due to stock price increases in major countries following improved earnings of AI and semiconductor companies.

By product, foreign stocks increased significantly by $9.01 billion, while foreign bonds decreased by $1.79 billion.

Foreign stocks increased as net investments combined with valuation gains due to rising stock prices in major countries. The balance of foreign stock investments has increased for three consecutive quarters, rising by $12.55 billion in Q4 last year and $8.85 billion in Q1 this year.

On the other hand, foreign bonds decreased by $1.79 billion due to valuation losses caused by rising interest rates in major countries.

Korean paper issued abroad by domestic financial institutions or companies saw net investments increase mainly by securities firms, resulting in a $1.16 billion rise compared to the end of the previous quarter.

By institutional investor type, asset management companies ($7.55 billion), securities firms ($1 billion), and insurance companies ($230 million) increased their investments, while foreign exchange banks decreased by $400 million.

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