Last Year Institutional Overseas Securities Investment $32.58 Billion ↑... Stock Price Rise and Net Investment Expansion

The balance of overseas securities investments by institutional investors in South Korea increased by $32.58 billion last year. This was due to valuation gains from rising stock prices in major countries and an expansion in net investments.

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According to the "2024 Foreign Currency Securities Investment Trends of Major Institutional Investors" released by the Bank of Korea on the 28th, 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 stood at $420.33 billion at the end of last year, up $32.58 billion (8.4%) from the end of the previous year. This increase was influenced by valuation gains from rising stock prices in major countries due to the robust growth of the U.S. economy and strong earnings from AI and semiconductor companies, as well as an expansion in net investments. However, compared to $427.41 billion at the end of the third quarter of last year, it decreased by $7.08 billion. Although net investments remained positive, it is analyzed that non-transaction factors such as rising bond yields had a significant impact.

By type of institutional investor, asset management companies ($23.63 billion), foreign exchange banks ($4.39 billion), securities firms ($4.07 billion), and insurance companies ($0.5 billion) all saw increases.

By product, the balance of foreign stock investments was $226.21 billion, up $29.3 billion from the end of the previous year. Foreign stocks increased due to valuation gains from rising stock prices in major countries and additional net investments centered on asset management companies. Last year, major stock markets such as the U.S. Nasdaq (28.6%) and Dow (12.9%), Japan's Nikkei 225 (19.2%), and Europe's Euro Stoxx 50 (8.3%) showed upward trends. However, compared to the balance at the end of the third quarter of last year ($227.46 billion), it slightly decreased.

Foreign bonds increased by $1.29 billion, and the balance of Korean paper, foreign currency-denominated securities issued by residents abroad, also increased by $1.99 billion. Foreign bonds increased despite valuation losses caused by rising interest rates in major countries, due to net investment expansions by foreign exchange banks and insurance companies. Korean paper increased mainly through securities firms and foreign exchange banks.

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