SEOUL — In a notable shift in investment strategy, South Korean institutions heightened their stakes in foreign securities throughout 2023, leveraging robust earnings from a surge in artificial intelligence and chip-related stocks, alongside sound growth in the U.S. economy, revealed data from the central bank on Wednesday.
According to Yonhap News Agency, the outstanding value of foreign securities held by local institutional investors reached $387.76 billion at the end of December, marking an increase of $22.47 billion from the year prior. This year-on-year expansion is attributed primarily to the appreciable growth in the value of foreign stocks held in major markets by these institutions.
The composition of foreign securities, encompassing stocks, bonds, and "Korean paper" — foreign currency-denominated securities issued by South Korean entities in overseas markets — saw a significant upturn. Investment in foreign stocks by local institutions surged by $23.76 billion year-on-year to $196.93 billion. Conversely, the value of their holdings in foreign bonds saw a slight contraction, decreasing by $1.24 billion to $162.6 billion over the same period. This shift underscores the growing inclination of South Korean institutional investors towards diversifying their portfolios with lucrative foreign equity assets amid global market dynamics.