Foreign stock ownership tops 400 trillion won

Foreign ownership of stocks listed on the Korea Exchange has exceeded 400 trillion won ($373 billion) for the first time.

The record figure comes four years after their holding reached 300 trillion won in May 2007.

The Financial Supervisory Service said Wednesday that foreign investors’ holdings of local shares came to a record high of 412.5 trillion won at the end of April, up 17.1 trillion won from a month before.

The regulatory body attributed the activity to strong earnings of enterprises as well as eased external risks such as the Japanese quake and eurozone debt crisis.

“The record-high figure came after foreigners purchased a net 4.4 trillion won worth of local stocks and steep gains in the KOSPI index helped drive up the value of foreign holdings,” the FSS said in a statement.

Foreigners switched to a net-buying mode in April after slashing holdings in the previous two months due to the unfavorable external factors.

Luxembourg, a tax-haven with many hot-money managers, was the biggest foreign stock buyer in April, picking up a net 1.01 trillion won, followed by Britain with 872.3 billion won, France with 717.8 billion won and the U.S. with 691.1 billion won.

The portion of their stock holding accounted for 30.8 percent of the total market capitalization on the Korean bourse, though it inched up 0.2 percentage point from March.

The ratio for April was also lower than the 31.2 percent posted last December.

It is an apparent drop from a record high of 42.07 percent in July 2004. Their stock holding portion has ranged between 26 and 32 percent since the 2008 global financial crisis.

Foreigners, meanwhile, bought a net 1.13 trillion won worth of local bonds last month, pushing up their total debt holdings to 76.18 trillion won, or 6.6 percent of the total market cap as of end-April, the FSS said.

It was up from 75.32 trillion won in debt holdings by foreigners a month earlier.

The FSS said the April inflow to the bond market marks the third monthly net purchase in a row by foreign investors.

By Kim Yon-se (kys@heraldcorp.com)