South Korean institutions' investment in foreign securities touched a new all-time high in 2021 amid bullish overseas stock markets, central bank data showed Wednesday.

The outstanding value of foreign securities held by local institutional investors stood at $402.72 billion as of end-December last year, up $29.97 billion, or 8 percent, from a year earlier, according to the data from the Bank of Korea (BOK).

The on-year increase, however, slowed from the $42.09 billion gain reported for the previous year as falling bond prices eroded the value of institutions' debt holdings.

Foreign securities include stocks, bonds and "Korean paper," which refers to foreign currency-denominated securities issued by the South Korean government, banks and companies in overseas markets.

Local institutions' investment in foreign stocks surged by $36.91 billion over the cited period on the back of strong equity markets in the United States and European nations.

In contrast, the value of their foreign bond holdings shrank by $1.43 billion as rising interest rates led to weaker bond prices.

Investment in Korean paper also declined by $5.51 billion over the same period, according to the data. (Yonhap)