In the first quarter of this year, Korea's major institutional investors increased their overseas securities investment balance by more than $10 billion compared to the end of last year. This was a result of more investors buying low in the U.S. stock market, anticipating adjustments. Bond investments also increased due to expectations of a policy rate cut by the U.S. Federal Reserve.
According to the 'First Quarter Major Institutional Investors' Foreign Currency Securities Investment Trends' report released by the Bank of Korea on the 30th, the foreign currency securities investment balance (market value) of major institutional investors such as asset management companies, insurance companies, foreign exchange banks, and securities companies at the end of March this year was $430.39 billion. This is an increase of $10.05 billion (2.4%) compared to the end of last year.
According to the Bank of Korea, the increase in institutional investors' foreign currency securities investment balance was due to the influx of low-price purchases following U.S. stock price adjustments and continued expectations of a U.S. interest rate cut, which expanded net investment in foreign stocks and bonds.
By product, the foreign stock balance was $232.58 billion, an increase of $6.37 billion from the end of last year. Despite valuation losses due to U.S. stock price adjustments, foreign stocks saw a significant increase as net investment expanded, centered on asset management companies.
The foreign bond balance was $166.74 billion, an increase of $2.85 billion during the same period. With expectations of a U.S. Federal Reserve interest rate cut continuing, net investment by insurance companies and asset management companies expanded. Korea Paper, which are foreign currency-denominated securities issued overseas by domestic companies, increased by $840 million, mainly through foreign exchange banks and securities companies.
By institutional investor, asset management companies' investment balance was $297.32 billion, an increase of $7.55 billion from the end of last year. Insurance companies also increased by $2.56 billion, to $68.25 billion. Securities companies ($19.27 billion) increased by $500 million, while foreign exchange banks ($45.55 billion) decreased by $560 million.