Last month, the net inflow of foreign investment in domestic securities (stocks and bonds) in Korea was $4.8 billion. With the easing of trade uncertainties and the improved outlook for major corporations like semiconductors, more than $2.4 billion flowed into stocks alone.
According to the Bank of Korea, which announced the 'Trends in International Finance and Foreign Exchange Markets' on the 12th, last month, the net inflow of foreign investments in domestic securities reached $4.83 billion. This marks three consecutive months of net inflows. However, compared to June ($5.08 billion), the size of the net inflow has decreased.
The net inflow means that the amount of foreign investment entering the Korean stock and bond market exceeded the outflow.
By type of securities, the net inflow of foreign investors in stocks was $2.444 billion, while bonds saw a net inflow of $2.4 billion. The inflow into stocks has continued for three months, while bonds have seen a net inflow for six months.
A Bank of Korea official noted that the stock investments were driven by expectations of easing tariff uncertainties in the U.S. and improved outlooks for major corporations like semiconductors. Regarding bond investments, he explained that they have continued at levels similar to previous years.
Last month, the credit default swap (CDS) premium for Korean government bonds (based on 5-year foreign exchange stabilization fund bonds) averaged 24 basis points (1bp=0.01 percentage point), down 3 basis points from the previous month (27bp). During the same period, the average fluctuation of the won-dollar exchange rate was 5.1 won, with a volatility rate of 0.37%. Volatility has decreased compared to the previous month (8.8 won, 0.64%).