S.Korea's institutional investment in foreign securities posts lowest growth in 5 years

SEOUL, Feb. 27 (Xinhua) -- Investment by South Korean financial institutions into foreign securities posted the lowest growth in five years on global stock market slump and higher policy rates, central bank data showed Wednesday.

Institutional investors, including asset managers, insurers and brokerages, held foreign securities worth 262.3 billion U.S. dollars as of end-2018, up 16.8 billion U.S. dollars from a year earlier, according to the Bank of Korea (BOK).

It was the lowest yearly increase since 2013, and about a quarter of the 68.9-billion-U.S. dollar expansion in 2017.

The institutional investment in foreign stocks added 4.99 billion U.S. dollars over the year to 78.09 billion U.S. dollars at the end of 2018, marking the lowest gain in three years.

The slow growth was attributed to global stock market slowdown. U.S. stocks declined 5.6 percent last year, while those from the European Union (EU) and Japan posted a double-digit decline.

Institutional ownership of foreign bonds stood at 142.8 billion U.S. dollars as of end-2018, up 14.42 billion U.S. dollars from a year earlier. It was the lowest growth in four years as local financial institutions refrained from buying bonds amid expectations for higher policy rate.

The U.S. Federal Reserve raised its benchmark interest rate four times last year to a range of 2.25-2.50 percent.

Meanwhile, investment in the so-called Korean Paper, issued overseas by local residents, reduced 2.66 billion U.S. dollars from a year earlier to 41.41 billion U.S. dollars as of end-2018.