Bloomberg News

Overseas Investors Lowered Korean Bond, Stock Holdings in April

May 02, 2012

Global funds pulled money from South Korea’s local-currency bonds and stocks in April, the first time they cut holdings of both securities since November, according to data from the financial regulator.

The value of won-denominated debt owned by overseas investors fell by 1 trillion won ($884 million) to 87.6 trillion won from the previous month, and accounted for 7.1 percent of outstanding notes, the Financial Supervisory Service said in an e-mailed statement today.

Funds based in Thailand were the biggest sellers, with ownership falling 854.2 billion won, followed by the Netherlands and the U.K., FSS data showed. French investors were the top buyers ahead of Kazakhstan and Norway, adding 380.5 billion won, according to the regulator. South Korea’s three-year government bond yields fell 10 basis points, or 0.10 percentage point, to 3.45 percent last month, Korea Exchange Inc. prices show.

Overseas investors sold 595.7 billion won more of the nation’s equities than they bought last month, led by the U.K., the U.S. and Luxembourg. Foreign funds offloaded South Korean shares in April to profit from the stock rally this year and as the European debt crisis re-ignited, according to the financial watchdog.

The Kospi (KOSPI) Index fell 1.6 percent in April, the biggest monthly loss since November. It closed at 1,999.07 yesterday, a gain of 9.5 percent in 2012. The won traded 0.3 percent lower at 1,130.63 per dollar as of 11:37 a.m. in Seoul, and has climbed 1.9 percent this year, according to data compiled by Bloomberg.

To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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