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Foreign investors buy Korean stocks, bonds in Dec.

Jan 12,2019
Foreigners remained net buyers for two straight months in the Korean financial market last month on rising expectations for U.S.-China trade negotiations, the central bank said Friday.

Foreigners purchased a net $1.49 billion worth of Korean stocks and bonds in December following a net buying of $360 million in the previous month, according to the Bank of Korea (BOK).

They bought a net $1.35 billion worth of local bonds and Korean stocks worth a net $130 million last month.

The BOK said investors were optimistic about the Washington-Beijing trade talks after the Donald Trump-Xi Jinping meeting in late November.

The average daily variation of the won-dollar rate, which shows the change from the previous session’s closing price, widened to 4.6 won in December from November’s 3.5 won.

The credit default swaps premium for foreign exchange stabilization bonds was 39 basis points in December, down from 42 basis points a month ago.

For the whole of 2018, foreigners bought a net $8.25 billion worth of Korean securities, down sharply from a net buying of $19.5 billion the previous year.

In the stock market, they became net sellers for the first time in three years, offloading a seven-year high of $5.66 billion worth of local stocks. They scooped up a net $11.45 billion in 2017.

The benchmark Kospi slumped 17.8 percent on-year to finish at 2,041 points in 2018 from the previous year’s close of 2,467.5 points.

However, foreign investors were strong buyers in the bond market. Their net purchases rose to $13.91 billion last year from $8.05 billion the year before, the data showed.


Yonhap