Korean institutional investors' foreign currency securities holdings surged by nearly $90 billion last year.
According to the "Trends in Foreign Currency Securities Investment by Major Institutional Investors" report released by the Bank of Korea on the 4th, foreign currency securities holdings (at market value) reached $507.83 billion at the end of last year. This represents an increase of $87.24 billion (20.7%) compared to the previous year. Both the total holdings and annual increase set all-time records.
By investor type, holdings increased across all categories: asset management companies (+$68.1 billion), insurance companies (+$9.43 billion), foreign exchange banks (+$5.91 billion), and securities firms (+$3.8 billion).
Among investment products, foreign equities showed the largest increase at $66.04 billion, while foreign bonds grew by $18.98 billion. Foreign currency-denominated securities issued overseas by domestic financial institutions and corporations (Korean Paper) also rose by $2.22 billion.
"For foreign equities, valuation gains increased due to stock price rises in major countries including the United States, with net investments also added primarily by asset management companies," a Bank of Korea official explained. "Foreign bond holdings also grew as valuation gains occurred from declining U.S. Treasury yields following the Federal Reserve's interest rate cuts, while net investments by insurance companies and others expanded."