Foreign investors scoop up local stocks for fourth consecutive month

[YONHAP]

Foreign investors scooped up Korean stocks in February for the fourth consecutive month on the back of hopes for a recovery in the chipmaking sector and stock-boosting measures, central bank data showed Wednesday.

Offshore investors bought a net US$5.59 billion worth of local stocks last month, following $2.64 billion worth of purchases in November, $2.52 billion in December and $2.51 billion the previous month, according to the data from the Bank of Korea (BOK).

The February purchases also marked the largest since September 2013, when the comparable figure was $7.66 billion.

The central bank said foreigners' net stock purchases came amid the outlook for a rebound in the chipmaking sector and measures to boost undervalued stocks despite woes over a delay in restrictive monetary stances in major economies.

Foreigners bought a net $2.52 billion worth of local bonds last month, following a net purchase of $1.89 billion a month earlier, the data showed.

Meanwhile, the premium on credit default swaps (CDS) for Korea's five-year dollar-denominated currency stabilization bonds amounted to 32 basis points in February, up from 29 basis points the previous month. A basis point is 0.01 percentage point.

The CDS premium reflects the cost of hedging credit risks on corporate or sovereign debt. A rise implies a drop in the credit spreads of sovereign bonds and higher borrowing costs.

Yonhap