By Jiyeun Lee - Dec 4, 2011 10:00 AM GMT+0700
Global funds pulled money from South Korea’s local-currency bonds and stocks last month, after boosting their holdings in October, according to data released today by the financial regulator.
The amount of fixed-income securities owned by overseas investors fell by 336.9 billion won ($299 million) to 86.7 trillion won, the biggest drop since January, the Financial Supervisory Service said in an e-mailed statement today.
Funds based in Thailand were the biggest sellers, cutting holdings by 446 billion won, the regulator said. U.S. investors cut ownership by 373.3 billion won, the first month since July that they were net sellers. Malaysian investors were the biggest buyers with holdings increasing by 450 billion won, while Australian funds boosted ownership by 188 billion won, FSS data showed. Funds in Malaysia and China have been net investors every month this year, according to the regulator.
Overseas investors sold 3.2 trillion won more of the nation’s stocks than they bought in November, FSS data showed. Funds based in the U.K. were the biggest sellers, followed by those in Switzerland and the U.S., it said. Holdings were cut as investment banks in Europe sold shares to realize profit and reduce risks, the FSS said.
The won weakened 2.8 percent against the dollar in November, after gaining 6.1 percent the previous month, according to data compiled by Bloomberg. The nation’s benchmark three-year bond yield fell 13 basis points to 3.38 percent and the Kospi (KOSPI) Index of shares lost 3.2 percent, Korea Exchange Inc. prices show. A basis point is 0.01 percentage point.
To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
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