By Kang Seung-woo
Staff reporter
High expectation for South Korea's economic rebound lured foreign investments in its stock and bond markets last year.
The Financial Supervisory Service (FSS) announced Monday that the amount of listed stocks owned by non-Korean investors increased by 125.3 trillion won ($103.73 billion), or 73.4 percent, to 296 trillion won, compared with a year earlier, and their bond volume totaled 56.49 trillion won, up 19.29 trillion won from the previous year.
"Thanks to rising hopes for an economic recovery, influx of money to the emerging markets, including Korea has been advancing since March 2009," said Choi Hyun-phil, a senior manager of Financial Investment Department at the FSS.
An economist also attributed the bright outlook to an economic bounce to the surge of investment.
"The bankruptcy of Lehman Brothers in September 2008 added to the selling pressure in South Korea and the local financial markets suffered a major exodus by foreign investors," said Lee Chang-seon, managing director of the financial research department at LG Economic Research Institute.
"However, since then, the Korean economic recuperated in 2009, which helped the holding amount to move up."
He also said, "From a medium- or long-term perspective, the local financial markets are likely to get better, as the Asian market is expected to play an important role in the world economy in the post-crisis era."
According to the financial watchdog, the possession of institutional investors in listed stock stood at 294.62 trillion won, accounting for 99.4 percent, compared to merely 1.9 trillion won by individual counterparts.
Among institutional investors, about half of them, or 46.1 percent, infused money into investment company, followed by bank (16.1), pension funds (9.4), insurance (2.9) and securities (2.6).
Others, including national wealth fund, represented 22.3 percent, or 65.97 trillion won.
By nation, the United States topped the list for the second straight year, representing 38.1 percent and Britain is the other nation to post a double-digit percentage with 12.9 percent.
Luxemburg, Singapore and the Netherlands rounded out the top five like 2008.
In the local bond market, special-purpose bonds tallied an 11.7 trillion won growth to 28.61 trillion won and governments bonds were 7.45 trillion won higher, while corporate bonds were off 132.3 billion won.
Thailand retained its billing as the highest bond investing country in the Asia's fourth-largest economy at 16.74 trillion won in the sum total, or 29.6 percent, followed by the United States (15.9), Luxemburg (8.5), Hong Kong (6.1) and France (6.0).
"Thailand has been steady since last year," Choi said.
The Southeast Asian nation invested 90.19 trillion won in 2008, edging runner-up France by less than 8 trillion won.
According to another FSS official, the interest rate gap between two nations has led to Thailand's onrush to the Korean market.