MMF's net value tops 130 tln won

The net asset value of money market funds in South Korea has exceeded 130 trillion won ($117 billion) for the first time, as investors have increasingly favored short-term financial instruments, data showed Tuesday.

MMFs are short-term debt securities such as Treasury bills and commercial papers, considered as safe as bank deposits but with a relatively quick and high return.

Their growing popularity here reflects an increase in "floating" capital amid unrelenting economic uncertainties at home and abroad.

Some investors are also seen as withdrawing money provisionally from the local stock market for profit-taking.

As of last Friday, the net asset value of MMFs rose by 944.8 billion won to 131.2 trillion won from a day earlier, according to Korea Financial Investment Association.

Individuals and corporations owned 27.2 trillion won and 102.9 trillion won worth of MMFs, respectively.

The previous record was set at 129.6 trillion won on March 6, 2009, amid a financial crisis stemming from the United States.

"Since the Korea Composite Stock Price Index exceeded the 2,000-mark, the sell-off of stock-related funds has grown," a financial industry official said. "(The increased net value of MFFs appears affected by the inflow of such short-term investment money." (Yonhap)