Korean Won Advances for a Second Day as Stock Gain Fuels Demand

By Kim Kyoungwha

April 23 (Bloomberg) -- South Korea’s won rose for a second day on speculation rising local stocks will prompt overseas investors to increase their holdings of the nation’s assets.

The Korean currency strengthened 2.7 percent so far this month, after an 11 percent rally in March, as signs a global recession is abating bolstered demand for emerging-market assets. Global funds have bought more Korean shares than they sold every day this month except five, according to Korea Exchange.

“Stocks are lending some support to the won,” said Roh Sang Chil, a currency dealer with Kookmin Bank in Seoul. “It will probably trade listlessly for a while as there’s no big momentum or incentives to push the won either way.”

The won rose 0.1 percent to 1,346.35 per dollar as of 9:30 a.m. in Seoul, according to data compiled by Bloomberg. The currency has lost 6.4 percent this year, the biggest drop among Asia’s 10 most-traded currencies outside of Japan. The Kospi stock index rose 0.4 percent, a fourth day of gains.

South Korea’s stock and currency markets are “stable” and the economy is showing both positive and negative signs, Vice Finance Minister Hur Kyung Wook said on KBS radio in Seoul yesterday.

Investors pumped more money into emerging-market equities for a sixth straight week, adding a net $1.7 billion through April 15 as they sought higher returns, according to Cambridge, Massachusetts-based EPFR Global, a research company that tracks $11 trillion of funds.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net;