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Institutions' investment in foreign securities down in Q1


South Korean institutions' investment in foreign securities dropped in the first quarter, central bank data showed Monday, partly due to a market slump caused by the COVID-19 pandemic.

The combined value of overseas stocks and bonds held by South Korean institutions came to $317.8 billion as of end-March, down $9.61 billion from three months earlier, according to the data from the Bank of Korea (BOK).

The drop marks a sharp turnaround from a $14.6 billion on-quarter spike posted in the last three months of 2019.

Such a decline is "largely attributed to a dip in stock prices of major countries due to the spread of the new coronavirus, while demand for overseas bonds also dwindled," the BOK said.

Investment in foreign stocks slipped $5.15 billion to some $102.3 billion in the three months ended March 31, with investment in overseas bonds dipping $4.94 billion to $172.7 billion, according to the BOK.

Investment in Korean papers, foreign currency-denominated securities issued by South Korean governments, banks and companies in overseas markets came to $42.83 billion as of end-March, up $480 million from three months earlier.

By institution, foreign securities held by asset management firms came to $184.9 billion, down $7.31 billion, with those held by insurance companies and securities firms coming to $85.4 billion and $21.1 billion, respectively, down $2.32 billion and $10 million.

The COVID-19 pandemic has adversely affected nearly all major stock markets throughout the globe, including those of South Korea.

The BOK has said foreign investors here had net sold nearly $5.3 billion worth of local stocks and bonds in the January-March period, dumping over $11 billion worth of local shares in March alone, marking the largest monthly sell-off since the BOK began compiling such data in January 2007.

South Korea has reported some 11,400 infection cases since reporting its first confirmed case on Jan. 20. (Yonhap)