Investors benefit as foreign holdings rise in Q1

Korean investments in overseas securities rose in the first quarter mainly due to the rise in the value of foreign shares owned by local institutions, the central bank said yesterday.

Institutional investors’ holdings in foreign stocks, bonds and so-called Korean papers reached an outstanding $62.2 billion as of the end of March, up $4.3 billion from three months earlier, according to the Bank of Korea (BOK).

The data represents a rebound from a 16 percent drop in the value of overseas securities held by local investors tallied for the whole of 2011.

The decline was caused by local asset managers reducing their holdings in the face of general market instability.

Korean Paper refers to foreign-currency-denominated securities issued by Seoul, financial institutions or companies based abroad.

The central bank said that besides the rise in foreign stock prices in the January-March period, local insurers became net buyers of debts and other Korean papers that helped to push up total holdings.

Stock markets in the United States and China rose 8.1 percent and 2.9 percent, respectively, in the first quarter. Shares prices in Brazil, India and Hong Kong all moved up by double digits.

Investments in foreign stocks rose $2.38 billion on-quarter to over $29.4 billion as of end-March and those in overseas bonds gained $840 million to $14.18 billion, said the BOK. Yonhap