The Korea Herald

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Foreign bond investment keeps uptrend in April

By 이다영

Published : May 24, 2015 - 11:50

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Foreign investment in South Korean bonds continued to increase in April, with their holdings hovering over the 100 trillion (US$92 billion) won mark for five months running, data showed Sunday.

Foreign holdings of bonds listed on the local bourse stood at 102.7 trillion won as of the end of April, up 100 billion won from the previous month, according to the data by the Financial Supervisory Service and the related industry.

The amount of won-denominated bonds held by foreign investors had been on the rise since surpassing the 100 trillion won level in November last year.

In particular, China's investment in South Korean bonds has been rising sharply this year.

In the first four months of this year, Chinese investors bought a net 2 trillion won worth of South Korean bonds, with U.S. investors' net purchase reaching a mere 170 billion won in the January-April period.

In April, foreign bond holdings rose 6.6 percent from a year earlier, with U.S. investors' holdings remaining unchanged at 18.8 trillion won. The portion of their holdings to the total dropped to 18.3 percent from 19.5 percent during the period.

In contrast, Chinese investors' holdings soared 27.6 percent on-year to 16.7 trillion won, with their share also climbing to 16.3 percent from 13.6 percent.

Market watchers said China will likely emerge as the largest investor in South Korean bonds within this year in light of the upturn in Beijing's investment, overtaking the U.S.

"Chinese investors are likely to keep pouring money into South Korea bonds down the road," said Kim Ji-man, a researcher at NH  Investment & Securities Co. "Given that, China is expected to overhaul the U.S. as the top investor in South Korean bonds in November this year."